The emergence of banks not owned or operated by traditional banking companies is a fast-growing trend, says Chris Skinner, London-based director of cross-industry banking strategies with NCR.
He says industries showing the most interest are telcos, airlines and retailers.
Traditional banks make up 65% of NCR’s revenue but the company is increasingly selling its ATMs and other virtual banking solutions outside the banking industry.
In the United States, NCR has seen the number of ATMs installed in non-banks increase by 30% and is working to integrate retail functions into ATM kiosks. “We’re also looking at things such as marketing at the tills (eg loyalty schemes) and ways they can relate to banking. Retailers can use the banking connection to analyse the way customers spend their money outside the retail chain through looking at what other transactions they make elsewhere. But there is a trade-off. If you’re going to give that sort of information, the retailer will have to offer some value, ie better interest rates, discounts.
“Telcos, airlines and retailers are now moving into the retail area of banking. Retailers want to own the physical space because they want to be a one-stop commerce shop. Telcos are looking for electronic ownership. It could be Sky and the entertainment companies also. They want delivery into the home.”
Skinner says the types of business going into banking are those with a strong brand image or those with a strong physical or electronic customer delivery infrastructure.
Two of Britain’s major supermarket chains Tesco and Sainsburys have recently opened banks. Tesco Personal Financial Services is owned by Royal Bank of Scotland and Sainsburys Bank is owned by the Bank of Scotland, which also owns Countrywide.
Skinner says just as non-banking companies such as Qantas are now offering credit cards (25% of credit cards are offered by companies that are not banks), they will also start offering other bank products such as mortgages and loans.
The trend is working both ways with banks such as Wells Fargo in the United States putting branches into supermarkets and many banks exploring alternative delivery channels such as the ASB with electronic home banking.