“A key priority in the shirt-to medium term will be staying on top of the migration of ‘banking’ activities beyond the traditional banking sector,” said the PricewaterhouseCoopers (PwC) report, entitled ‘The Future Shape of Banking.’
Alongside the changing banking landscape are evolving customer needs which, according to PwC, is driving banks to not only change how they provide their services but also applying technology into everyday transactions.
“It’s conceivable that leadership in banking services could be taken up by a new generation of customer-focused, technology-savvy enterprises. And these would not necessarily need to be banks,” PwC explained.
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Africa’s banking sector in particular has been a strong example of the marriage between technology and financial services to provide more services to those already banked and providing basic banking services to the unbanked.
According to a McKinsey & Company report, roughly 2.5 billion people in the world do not use traditional banking systems to borrow or save money.
Mobile money applications such as Kenya’s Mpesa and First National Bank’s eWallet services in South Africa are nevertheless making it easier for people to send and borrow money, and become a part of the formal financial services sector.
(READ MORE: Breaking barriers of the unbanked and underserved)
Elsewhere, technology services are also entering the banking space, such as Facebook, which plans to obtain an Electronic Money Institution license and Google Wallet.
PwC added that the scope of the global regulation process will also need to change as traditional banking approaches are replaced with more pervasive ones.
“The banking policy and regulatory community will face its own challenges and struggle for relevance,” said PwC.
“Rolling forward, the provision of banking services may no longer be restricted to a set of regulated banking institutions, but could be opened up instead to a more diffuse set of commercial enterprises that would extend into other financial and non-financial service domains.”