Online banking and technology-based financial service providers continue to gain momentum in the financial markets, and because of this, traditional banks in North America are poised to lose billions in revenue, a report has revealed.
Accenture, a consulting firm, published a report revealing that traditional banks will most likely lose at least 15% of their payment revenue by 2025 as tech giants continue to grow in the banking sector with non-banks innovations and tech-based banking services. The report says that at least $88 billion in North America’s payments revenue could be lost by 2025 as competition with real-time payment services, non-banks, and other digital financial service providers become tougher.
The report also highlights that nearly all the loses will be incurred by U.S. banks. They foresee that nearly $82 billion out of the $88 billion will be displaced from banks based in the U.S. and only $6 billion from Canadian financial institutions.
“With new entrants introducing instant and invisible payment options, combined with pricing compression, banks that are unable to shift to digital business models face a future of revenue loss and diminishing relevancy,” Kevin Grieve, Accenture’s North America lead for payments, said in a press statement.
Meanwhile, an earlier report reveals that digital-only banks top traditional and legacy banking in terms of having the best banking app. Monzo, the UK-based online challenger banking app, snatched the top spot in the best banking app, according to a study conducted by MoneySavingExpert.com. Around seventy-eight percent of the surveyed users trust Monzo bank in terms of different features and its usability.
The app is a challenger bank and a mobile-only bank based in the United Kingdom and initially operating through a mobile app and a prepaid debit card, in April 2017. After certain bank restrictions were lifted in the UK, Monzo started offering current accounts and has also announced that they will also provide business accounts too. It prides itself with over 2.5 million users around the world.