3. Partnerships





Bank bosses complain loudly of an uneven playing field that allows big technology groups to offer financial services without the burdensome regulation that traditional lenders face. That has not stopped some banks teaming up with Big Tech groups.





One example possibly in the making is the potential partnership between JPMorgan Chase and Amazon, which would bring together the US’s biggest bank and the largest US ecommerce company. The deal would give JPMorgan access to 100m Amazon customers using the Prime service. The partnership might be extended into other areas such as an Amazon-branded checking account.





In Asia, Standard Chartered has teamed up with China’s Alipay to launch a digital remittance service, using blockchain technology to send money across borders quickly and cheaply. The duo has also teamed up with GCash, the mobile payments arm of Globe Telecoms in the Philippines, to allow people to send money between Hong Kong and the Philippines using their mobile phones. The plan is to expand the service to other markets.





4. Diversification





While their core payments and lending businesses may be under pressure from digital competitors, some banks are using new technologies to move into new markets.





Dave McKay, Royal Bank of Canada’s chief executive, recently unveiled a strategy to turn Canada’s biggest bank into a broader “platform” offering diverse services, from registering a start-up company to helping people rent their house on Airbnb.





When its customers are looking to buy or sell a home, RBC offers to research neighbourhoods, move furniture, paint a house and even decide which bins to take out each week.





Other banks, too, are branching out. Barclays offers to store important documents, such as passports and birth certificates, on the cloud for customers. Commonwealth Bank of Australia gives businesses insights into the spending habits of its customers through its Daily IQ tool.





5. ‘If you can’t beat them, join them’





Sometimes banks decide that the threat from digital competition is so great that they just have to amend their business models.





Ana Botín, executive chairman of Spain’s Banco Santander, said it was seeing her son using a rival service in order more quickly and cheaply to transfer money overseas, that persuaded her to make Santander the first international bank to launch a cross-border payments system based on blockchain.





Five years ago, France’s BNP Paribas launched Hello Bank as a standalone pan-European digital bank. Hello Bank now has more than 3m customers, including some gained through the acquisitions of Consorsbank in Germany and Compte-Nickel in France.





That said, launching new services is not easy.





Switzerland’s UBS said in August it was closing its automated online investment service, SmartWealth, to new clients. It had launched the robo advisory service in 2016, as part of a $1bn investment aimed at attracting younger clients and expanding its wealth management service beyond just the seriously rich.





The high price of using the service and a high minimum investment were deemed to have put off potential users, however, and UBS concluded that the “near-term potential” of the service was limited.



