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Recently mobile banking has improved its influence on the whole retail banking world, as traditional functions were taken over by goal-oriented start-ups. This can bring similar results to all other industries. Soon App Annie, a business intelligence company, plans to disclose some data that normal banks should be very concerned about. These facts are likely to show increasing popularity of fintech apps that is becoming mainstream, while the role of traditional banks reduces.

Relegation of Banking

Paul Barnes, Territory Director for Northern Europe and the Middle East, who works for App Annie said that the fintech start-ups have taken over the most lucrative aspects of retail banking, while the traditional banks were left with all sorts of administrative aspects.

According to him, traditional banking has been relegated recently. In order to understand this change, one should look at the basic functions of a traditional bank.

Banking licenses are needed for the main financial services like a monopoly on the formation of credit by means of small business loans or mortgages. However, it would be wrong to say that such functions are absolutely safe from collapse.

In 2015 the Bank of England gave its banking license to the first digital bank in Great Britain. On the other hand, it is hard to imagine how traditional banking system can be eliminated by some start-up with nothing but a blatant app.

By the way, read about biometric passwords in banks.

Where Banks Lose Their Edge

According to Paul Barnes, it is the functions of the customer service where traditional banks are really getting blunt. This includes, for instance, foreign currency exchange services, which are being offered at fintech apps such as TransferWise with better rates.

Meanwhile, other services like the online service of investment management Nutmeg are taking over other banking functions.

Paul Barnes suggests that the new package of measures entrusted by the CMA (Competition and Markets Authority) means potentially significant development. On 9 August the CMA reported the new measures to make sure that clients and customers will take advantage of the technological development.

Naturally, this will help the new participants of the banking race.

Implementation of Open Banking

It is important to mention that banks will be required to carry out Open Banking in the beginning of 2018. Thanks to this change small businesses and personal customers will be able to securely share data with third parties and other banks.

As a result, fintech start-ups will develop new apps meant to help customers and users control their financial information (check amazing personal finance apps right here).

Paul Barnes states that such change is an alternative to traditional banks, which are “not very responsive in allowing clients to come and use their services.”

According to his words, if banks don’t understand how to implement the app economy, even the most loyal clients will turn to functions and features of the mobile banking systems.

Lessons for Other Industries

A lot of banks are yet to adapt to mobile and digital functions, but a few of them are on their way. So, when the report will be released, it should be considered a wake-up call for numerous traditional banks. But what about other industries?

Barnes suggests that all other industries also have to learn the features of the new technology and understand how to place the client in the center of cooperation and interactions. For instance, some customers are still using checks, while the mobile phone camera has the potential to change this routine activity into an easy point-and-click task that requires only ten seconds.


Speaking about other industries, in shopping location-based services can be used on a smartphone in order to serve the tailored proposals. Once you learn to understand actual needs of the client, it will be easy to adapt the work of the company and boost it thanks to mobile apps. Another significant benefit is a chance to escape the hidden rocks that always involve data sharing.