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08. 07. 2018

Three cultural obstacles to digital growth – W.UP Digital Banking Weekly

Can’t reach your digital targets because of the lack of talent or funding? We’ve got bad news: there are even bigger hurdles to digital effectiveness. Speaking of which, the results of Atom and BBVA are worth a look.

Cultural barriers block digital effectiveness

When asked about stumbling blocks to digital effectiveness, bankers often cite the lack of people, money, proper infrastructure and even data. But there are three cultural barriers that surpass all these, research by McKinsey reveals.

Enter siloed mind-sets, a fear of taking risks and the difficulty of developing a single view of the customer. The findings show that companies should put just as much effort into achieving a real cultural transformation as into revamping their operations, The Financial Brand concludes.

Atom increases losses on pricing promotions

Digital-only Atom Bank more than tripled its assets to £2 billion in the last financial year. At the same time, the low mortgage rates and high savings offers they wowed customers with drove up losses to £53 million from £42 million, according to The Financial Times. These results highlight an all-too-common challenge that would-be digital disruptors face, namely, how to turn their skyrocketing user base into actual profits.

Should we redefine the term ‘challenger bank’?

Recent discussions on fintech influencer Chris Skinner’s blog about digital challenger banks stirred up a lively debate on what they actually are. Polymath Consulting’s David Parker, offers his take on the definition, saying companies without a banking licence are not challenger banks.

And the more players “perpetuate this mis-description”, the more they mislead consumers into thinking of companies offering bank-like services as challenger banks. “This denigrates the great Bank Lite solutions that are live in the market today and have no wish to be labelled a challenger bank,” he argues.

BBVA boosts digital sales, cuts costs in mobile

BBVA’s “strong push to business digitization not only drives sales but is fundamental to cost control,” CEO Carlos Torres Vila said after the Spanish lender published its latest results. Units sold by BBVA through digital channels have tripled over two years, accounting for 29% of the total on a value-weighted basis and 38.6% on an unweighted basis.

And that’s not all. BBVA also focuses on containing costs: introducing a global mobile banking platform through which developments in one country can be reused by any other country helped them cut costs by 40% and time-to-market by half.

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