The recent report revealed that digital media companies could participate in creating the financial future. In the meantime they are unlikely to take over from traditional banks. The experts predict that even with the hype about digital giants like Apple or Google wiping out the largest banks, traditional banks will still continue to develop and have the edge over their rivals.
According to the report, the evolution of the web still evokes the questions about the continued viability of the companies working in retailing and financial areas. The experts explained that this is because online giants were regarded as the commercial entities of the future.
Nevertheless, retail banking is believed to remain safe from such competition, despite the fact that online enterprises had a lot of things in their favor. For example, they had better data management and analytics expertise. Moreover, the Internet corporations also had rich experience in extending their value chain analysis beyond the core offering, while allocating their time and efforts at looking for new opportunities for themselves and highlighting certain customer needs.
On the other hand, web enterprises had no experience or good knowledge of security, while this was of a first priority for all banking applications. Although the likes of Facebook and Google were doing well with both the security and privacy needs of their users’ information, they wouldn’t be able to offer security services at the same level the banking industry can.
New players in the banking industry may also struggle to make sure the performance part of the financial systems were stable with this requirement challenging the business models of many of the newcomers. In the meantime, it is difficult to comply with various regulations because the Internet giants had to report to financial regulators.
The analysts confirmed that the current situation will result in digital giants being able to alter, shape and further influence the financial market when they help it develop and change by educating their clients and occasionally making catalytic forays into the innovative area of the market with niche financial services offerings. Nevertheless, the overall traditional banks are expected to continue to reign in the financial industry.
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