易凯资本：贵圈儿有点儿嗨--中国娱乐产业季度观察

易凯资本贵圈儿有点儿嗨中国娱乐产业季度观察COMMERCIALREALESTATEREDEFINEDHOWTHENEXUSOFTECHNOLOGYADVANCEMENTSANDCONSUMERBEHAVIORWILLDISRUPTTHEINDUSTRY1BANKINGREIMAGINEDHOWDISRUPTIVEFORCESWILLRADICALLYTRANSFORMTHEINDUSTRYINTHEDECADEAHEADDELOITTECENTERFORFINANCIALSERVICESCOMMERCIALREALESTATEREDEFINEDHOWTHENEXUSOFTECHNOLOGYADVANCEMENTSANDCONSUMERBEHAVIORWILLDISRUPTTHEINDUSTRYFOREWORD1THRIVINGINADISRUPTEDWORLD2ANEWORGANIZATIONALPARADIGMAGILE,COLLABORATIVE,ANDEXPOSED4FUTUREOFBRANDSNEEDFORDIGITALSAVVYANDASHARPERFOCUSONCUSTOMEREXPERIENCE6THENEWWORLDOFPAYMENTSBLOCKCHAINED,DIRECT,ANDSEAMLESS8FRICTIONLESSTRADINGMACHINEDOMINANCEANDTHESEARCHOFRELEVANCE11EVOLUTIONOFMARKETPLACELENDINGSURVIVALOFTHEFITTEST14ENDNOTES16CONTACTS17CONTENTSBANKINGREIMAGINEDHOWDISRUPTIVEFORCESWILLRADICALLYTRANSFORMTHEINDUSTRYINTHEDECADEAHEADBANKINGREIMAGINEDHOWDISRUPTIVEFORCESWILLRADICALLYTRANSFORMTHEINDUSTRYINTHEDECADEAHEADDISRUPTIONINBANKINGISATOPICDUJOURNOTSURPRISINGPERHAPS,IFONECONSIDERSTHEPREVAILINGBELIEFAMONGSILICONVALLEYSTARTUPSANDTHEBANKINGINDUSTRYCOGNOSCENTIALIKETHAT“FINTECH”FIRMSAREABOUTTODISRUPTBANKINGFORTHEBETTER2WHETHERONESUBSCRIBESTOTHISVIEWPOINTORNOT,NOONECANDENYTHATMANYASPECTSOFBANKINGANDCAPITALMARKETSAREBEINGATTACKEDBYNEWCOMPETITORS,WHOSECHIEFWEAPONISANARDENTBELIEFINTHEPOWEROFTECHNOLOGYTOUPENDCONVENTIONALWISDOMANDTRANSFORMBANKINGTHESCALEOFTHISASSAULTONINDUSTRYINCUMBENTSFROMDIFFERENTVANTAGEPOINTSISQUITESTAGGERINGTHEREARELITERALLYTHOUSANDSOFSTARTUPSALLOVERTHEWORLDFOCUSEDONPERCEIVEDVULNERABILITIESOFTRADITIONALINSTITUTIONS3YETCHANGEDOESNOTCOMEEASILYINBANKINGRARELYISITINITIATEDUNLESSDRIVENBYMARKETFORCESORREGULATORYEXPECTATIONSEVENWHENPROACTIVECHANGEISIMAGINED,DECADESOLDPRACTICESANDTHEVASTTECHNOLOGYINFRASTRUCTURETHATTOGETHERPOWERTHESEINSTITUTIONSPROVETOBEHUGEBARRIERSTHISDYNAMICISBOTHABLESSINGANDACURSETHEINEFFICIENCIESOFCURRENTSYSTEMSANDPRACTICESASSOCIATEDWITHTHISINFRASTRUCTURE,ANDTHEFOCUSONCUSTOMERVALUE,AREWHATATTRACTPOTENTIALDISRUPTORSBUTATTHESAMETIME,HAVINGTOBUILDTHENECESSARYTHRIVINGINADISRUPTEDWORLDELEMENTSOFTHISINFRASTRUCTUREFROMSCRATCHISADETERRENCETONEWDISRUPTIVEPLAYERSWITHBIGAMBITIONSRUNNINGAVASTANDCOMPLEXBANKINGBUSINESSTAKESENORMOUSRESOURCES,ASWELLASCREDIBILITYAMONGCUSTOMERS,COUNTERPARTIES,ANDREGULATORSBANKSANDCAPITALMARKETSFIRMSTOTHEIRCREDITARENOTSITTINGIDLYBY,BUTAREACTIVELYENGAGEDINTHISNEWECOSYSTEMOFDISRUPTION,WHILESTILLGRAPPLINGWITHTHECHALLENGESPRESENTEDBYEVOLVINGREGULATIONSINAPOSTCRISISENVIRONMENTOFCOURSENOONECANREALLYPREDICTWITHABSOLUTECERTAINTYHOWVARIOUSFORCESWILLCOMETOGETHERTOTRANSFORMTHEINDUSTRYBUTBASEDONWHATWEKNOWTODAY,WECANPOSTULATESOMEFUTURESCENARIOSANDTHISISPRECISELYWHATWEATTEMPTTODOINTHISREPORTCHALLENGEBANKSTOREIMAGINEWHATTHEIRINDUSTRYWILLLOOKLIKEINFIVETO10YEARSSOWHATDOWESEEINTHENEXTDECADEWEENVISIONANINDUSTRYWITHAVASTLYDIFFERENTCOMPETITIVELANDSCAPENEWENTRANTSWITHDIGITALPROWESSWILLGAINPROMINENCE,WHILEMANYINCUMBENTFIRMSWILLBEFORCEDTOALTERTHEIRSTRATEGIESTOCOMPETEASARESULT,THEREWILLBEGREATERINDUSTRYFRAGMENTATIONANDBLURRINGOFINDUSTRYBOUNDARIES,WITHFINANCIALSERVICESINCREASINGLYOFFEREDBYANEMERGINGBREEDOFNONBANKSTHEREWILLBEGREATEREFFICIENCIESACROSSTHEBOARDASARESULTOFGREATERAUTOMATIONCUSTOMEREXPERIENCEOVERALLWILLIMPROVEWITHEACHPASSINGYEAR,BUTTRADITIONALFIRMSFACETHEPROSPECTOFLOSINGCONTROLASTHESEDIGITALEXPERIENCESBECOMETHENORMWEALSOSEEGREATERCOMPETITIONBETWEENINCUMBENTFIRMSANDTHEFINTECHDISRUPTORSINSTITUTIONSTHATDEVELOPEXPERTISEINCOLLABORATINGWITHTHEIREXTENDEDNETWORKOFSUPPLIERS,PARTNERS,EXTERNALTALENT,ANDREGULATORSWILLHAVEMORECONTROLOVERTHEIRDESTINYTHEQUESTIONISNOTWHETHERTHEDISRUPTIONSTHATWEAREWITNESSINGTODAYWILLTRANSFORMBANKINGANDCAPITALMARKETS,BUT,RATHER,HOWWILLTHEYDOSOWHEREWILLTHENEWENTRANTSHAVETHEMOSTSUCCESSWHATTECHNOLOGICALDISRUPTIONSWILLTAKEROOTANDTRANSFORMTHEWAYBUSINESSISDONEWHATAREASWILLREMAINUNDERTHEDOMINANCEOFINCUMBENTSHOWWILLINCUMBENTORGANIZATIONSHAVETOADAPTTOTHRIVEINTHENEWECOSYSTEM2BANKINGREIMAGINEDHOWDISRUPTIVEFORCESWILLRADICALLYTRANSFORMTHEINDUSTRYINTHEDECADEAHEADTOHELPPREDICTHOWVARIOUSDISRUPTIONSWILLTRANSFORMTHEBANKINGINDUSTRY,WEENGAGEDINATHOUGHTEXERCISETOREIMAGINEAFUTURETHATESCHEWSCONVENTIONALWISDOMABOUTHOWTHEWORLDOPERATESTODAYFIGURE1SOMEOFTHESCENARIOSINTHISGRAPHICWHEELAREONLYDISTANTPOSSIBILITIES,WHILEOTHERSFORESHADOWALIKELYFUTURETHATCOULDBELESSTHANADECADEAWAYFIGURE1ATHOUGHTEXERCISEREIMAGININGTHEFUTUREOFBANKINGPOTENTIALFUTURESCENARIOSSERVICEWITHOUTBRANCHESLENDINGWITHOUTDEPOSITSCHOICEWITHOUTBRANDSINTERMEDIATIONWITHOUTBALANCESHEETSOPERATIONSWITHOUTINFRASTRUCTURETRADINGWITHOUTTRADERSPAYMENTSWITHOUTMIDDLEMENMAWITHOUTADVISERSINVESTINGWITHOUTMANAGERSBANKINGWITHOUTBANKERSEXPERIENCEWITHOUTBOREDOMSECURITYWITHOUTPRIVACYTHISEXERCISEINSPIREDUSTODELVEINTOFIVESPECIFICSCENARIOSTHATWEBELIEVEAREWORTHYOFIMMEDIATEATTENTIONTHESESCENARIOSAREDISCUSSEDINDEPTHTHROUGHOUTTHEREMAINDEROFTHISREPORTWEBELIEVETHESEFUTURESTATESWILLCREATENEWINDUSTRYSTRUCTURES,ANEWSETOFCOMPETITIVEDYNAMICS,ANDABOVEALL,NEWPARADIGMSSCENARIO1ANEWORGANIZATIONALPARADIGMAGILE,COLLABORATIVE,ANDEXPOSEDSCENARIO2FUTUREOFBRANDSNEEDFORDIGITALSAVVYANDASHARPERFOCUSONCUSTOMEREXPERIENCESCENARIO3THENEWWORLDOFPAYMENTSBLOCKCHAINED,DIRECT,ANDSEAMLESSSCENARIO4FRICTIONLESSTRADINGMACHINEDOMINANCEANDTHESEARCHFORRELEVANCESCENARIO5EVOLUTIONOFMARKETPLACELENDINGSURVIVALOFTHEFITTESTNOMATTERHOWVARIOUSDISRUPTIVEFORCESCOMETOGETHERTOTRANSFORMBANKING,WEBELIEVETHATTHECHANGESWILLBEANETPOSITIVEFORTHESTRONGERINCUMBENTSWHILETHEREWILLBEANUMBEROFCHALLENGESFROMMULTIPLEDIRECTIONS,WEBELIEVEADAPTIVEANDAGILEORGANIZATIONSWILLTHRIVEOURBELIEFISTHATTHISMETAMORPHOSISWILLCREATEAMOREDYNAMIC,HEALTHIER,ANDMORECOMPETITIVEBANKINGINDUSTRYINTHEDECADEAHEAD3BANKINGREIMAGINEDHOWDISRUPTIVEFORCESWILLRADICALLYTRANSFORMTHEINDUSTRYINTHEDECADEAHEADANEWORGANIZATIONALPARADIGMAGILE,COLLABORATIVE,ANDEXPOSEDMANYBANKSANDCAPITALMARKETSFIRMS,PARTICULARLYTHELARGE,COMPLEXINSTITUTIONS,HAVEBEENSIMPLIFYINGTHEIRBUSINESSANDOPERATINGMODELSOVERTHELASTFEWYEARS,BOTHFORECONOMICREASONSANDTOREDUCEORGANIZATIONALCOMPLEXITY4THEREISANINCREASINGREALIZATIONTHATTHEYDONOTORCANNOTEXCELATEVERYACTIVITY,ANDTHATITMAYBEEASIERANDCHEAPERTOOUTSOURCENONCOREACTIVITIESTHISRATIONALIZATIONHASTAKENVARIOUSFORMSBUSINESSESHAVEBEENSOLD,GEOGRAPHICFOOTPRINTSSHRUNK,ANDCAPITALANDRESOURCESREALLOCATEDINAMOREEFFICIENTMANNERTHISJOURNEYISNOTYETCOMPLETEFORANUMBEROFINSTITUTIONS,PARTICULARLYINEUROPE5OUTSOURCING,ESPECIALLYININFORMATIONTECHNOLOGYIT,ISNOTANEWTRENDINBANKINGANDCAPITALMARKETS6FORDECADESMANYINSTITUTIONSBENEFITTEDFROMSELECTIVEOUTSOURCINGOF“RUNTHEBANK”ACTIVITIESTOTHIRDPARTIESANDTHEOUTSOURCINGPHENOMENONHASNOTBEENRESTRICTEDTOTALENTALONESOFTWAREDEVELOPMENTORCUSTOMERSUPPORT,FOREXAMPLEBUTHASALSOINCLUDEDINFRASTRUCTUREITSYSTEMSANDDATAWAREHOUSESINTHEBROADERECOSYSTEM,THEINCREASINGADOPTIONOFCLOUDSERVICESBYFINANCIALSERVICESFIRMSANDTHEGROWINGPOPULARITYOFINDUSTRYUTILITIESTHEKNOWYOURCUSTOMERREGISTRY,FORONEHAVEMADEITMOREATTRACTIVEFORFINANCIALINSTITUTIONSTORELYONTHIRDPARTIESALSO,COSTCONSIDERATIONSANDTHENEEDFORMORESPECIALIZEDEXPERTISEARECOMPELLINGFIRMSTOADOPTNEW“WORKFORCEONDEMAND”MODELSANDGREATERUSEOFHOURLY,CONTINGENT,ANDCONTRACTWORKERS7WEARESEEINGTHEGROWTHOFINFRASTRUCTUREASASERVICE,ANDSOMEBANKSHAVEEVENSTARTEDEXPOSINGINTERNALSOFTWAREAPPLICATIONSTOEXTERNALDEVELOPERSASAWAYTOENCOURAGEDEVELOPMENTOFUSEFULNEWAPPS8ATTHESAMETIME,THEREAREALSOCERTAINACTIVITIESTHATAREBEINGBROUGHTINHOUSE,SUCHASTALENTACQUISITIONANDAPPLICATIONDEVELOPMENTTHEREASONSFORINSOURCINGINCLUDEADESIRETOCONTROLCOREPROCESSESANDGREATEROWNERSHIPOFINTELLECTUALPROPERTYWHATNEWOPERATINGMODELSAREMOSTEFFECTIVEINMANAGINGACOMPLEXECOSYSTEMOFEXTENDEDPARTNERSHIPSNOMATTERTHEUNDERLYINGMOTIVATIONS,WEEXPECTTHECONCEPTOFEXTENDEDPARTNERSHIPS,WHERETHEREISANINCREASINGRELIANCEONANETWORKOFPARTNERS,SERVICEPROVIDERS,ANDINDUSTRYUTILITIES,TOBECOMEMORECOMMONACROSSTHEINDUSTRYOVERTHENEXTDECADE9AGILEOPERATINGMODELSWILLBECOMEMOREIMPORTANTINMANAGINGCONSTANTCHANGEANDDEALINGWITHIMPERMANENCEMANAGEMENTCOMPLEXITYWILLINCREASE,REQUIRINGANEWBREEDOFLEADERSHIPTHATISMOREATTUNEDTOANEXTENDEDECOSYSTEMANDNIMBLEINITSAPPROACHBANKSAREALSOLIKELYTOFINDDIFFERENTWAYSTOENGAGEWITHINFRASTRUCTUREPROVIDERSINMANYINSTANCES,THELARGEINSTITUTIONSWILLWANTTHEIROWNPROPRIETARYINFRASTRUCTUREA“PRIVATECLOUD,”FOREXAMPLEFORMORECONTROL,WHILEOTHERSMAYOPTFORPUBLICSYSTEMSTHISEXTENDEDECOSYSTEMWHEREMOSTOFTHETALENTIS“NOTREALLYYOURTALENT,”ANDWHEREMOSTOFTHEINFRASTRUCTUREIS“NOTREALLYYOURINFRASTRUCTURE,”WHILEOFFERINGSOMEOBVIOUSBENEFITS,SUCHASREDUCEDCOSTSANDCOMPLEXITY,RAISESSOMENEWCONCERNS104BANKINGREIMAGINEDHOWDISRUPTIVEFORCESWILLRADICALLYTRANSFORMTHEINDUSTRYINTHEDECADEAHEADSPECIFICRECOMMENDATIONSTOPREPAREFORTHESCENARIOWHERETHEREISGREATERRELIANCEONTHIRDPARTIESFORINFRASTRUCTUREANDTALENT,LEADERSHIPINTHESEINSTITUTIONSSHOULDTHINKCONTINUALLYANDCREATIVELYABOUTTHEPOSSIBILITIESOFTHEEXTENDEDECOSYSTEM,ANDSTRATEGICALLYSTEERTHEORGANIZATIONTOWARDTHISFUTURESENIOREXECUTIVESANDTHEBOARDOFDIRECTORSSHOULDBEASKINGDETAILEDQUESTIONSABOUTTHESOURCINGANDMANAGEMENTOFINFRASTRUCTUREANDTALENTTHROUGHOUTTHEORGANIZATIONMANAGERSACROSSTHEFIRMSHOULDBEENCOURAGEDTORETHINKRESOURCEPLANNINGFORBOTHCOREANDNONCOREACTIVITIESNEWMANAGEMENTSKILLSWILLBENEEDEDINTHENEWECOSYSTEMMANAGERSWHOAREOPEN,MORECOLLABORATIVE,ANDWILLINGTOREALLOCATEANDREASSIGNRESOURCESBETWEENINTERNALANDEXTERNALPARTIESINAMOREDYNAMICWAYWILLLIKELYBEMOREEFFECTIVEBANKSWILLPROBABLYNEEDANEWKINDOFEXPERTISE,WHICHCANBENURTUREDINTERNALLYOROUTSOURCEDWORKINGWITHPROSPECTIVETALENTPOOLS,SUCHASBUSINESSSCHOOLS,TOEMPHASIZETHISECOSYSTEMORIENTATIONANDBUILDINGSTRONGRELATIONSHIPSWITHEXTERNALPARTIESSHOULDPAYDIVIDENDSFINALLY,TOPROMOTELOYALTYAMONGBOTHEMPLOYEESANDTHEEXFORCE,CREATIVEAPPROACHESTODEVELOPINGPARTNERSHIPORSERVICELEVELAGREEMENTS,ALONGWITHTALENTANDINCENTIVEMODELS,MAYBENECESSARYFIRMSWILLALSONEEDTOREEVALUATETRAININGINTHISNEWOPENANDCOLLABORATIVEECOSYSTEM5OURPREDICTIONCOSTPRESSURESANDTHEDRIVETOWARDSIMPLIFICATIONWILLCREATEANEWORGANIZATIONALPARADIGMRELIANCEONTHIRDPARTIESFORNONCOREINFRASTRUCTUREANDTALENTWILLBEACOMMONPHENOMENONBANKSWILLBECOMEINCREASINGLYCONNECTEDVIAACOMPLEXNETWORKORWEBOFVENDORSANDTHIRDPARTIESTHISEXTENDEDECOSYSTEM,WHILEOFFERINGMANYBENEFITS,WILLALSOPOSENEWOPERATIONALRISKSWHILEFINDINGRELIABLEINFRASTRUCTUREPARTNERSHASALWAYSBEENANIMPORTANTGOALINTHEPAST,IDENTIFYINGTHE“RIGHTPROVIDERS”INTHEFUTUREWILLBECOMEEVENMORESOASARESULT,WEEXPECTBANKSTOADOPTDIFFERENTSTRATEGIESINMEETINGTHEIRNEEDSSOMEMAYGOTOHIGHENDSERVICEPARTNERSINSTEADOFLOWCOSTOPTIONS,WHILEOTHERSWILLCHOOSETORELYONMORE“EXFORCE”OUTSIDETALENTTOMANAGEMANYOFTHEIROPERATIONSBANKSWILLALSONEEDTODEVELOPALTERNATECONTRACTINGANDPARTNERINGMODELSWITHDIFFERENTPLAYERSFORINSTANCE,WORKINGWITHATECHNOLOGYFIRMISFUNDAMENTALLYDIFFERENTTHANWHATBANKSDOTODAYWITHTRADITIONALOUTSOURCEDSERVICEPROVIDERSHOWEVER,FIRMSTHATHAVEDECIDEDTOINVESTINTHEIRINHOUSEINFRASTRUCTUREANDTALENTWILLLOOKTOMAXIMIZETHEIRVALUEBYSHARINGANDMONETIZINGTHESERESOURCESWITHOTHERSINTHEECOSYSTEM,AKINTOTHEMANYEXAMPLESWESEETODAYINTHESHARINGECONOMYINALMOSTALLCASES,MANAGINGTHISGROWINGNETWORKOFBUSINESSPARTNERSANDOUTSIDETALENTWILLALSORAISENEWRISKS,PARTICULARLYOPERATIONALRISKSVENDORRISKMANAGEMENTWILLNEEDTOBEELEVATEDANDONECANEXPECTCYBERSECURITYTOBECOMEMOREOFACONCERNASNETWORKSBECOMEMORECOMPLEXANDINTERCONNECTEDREPUTATIONALRISKWILLALSONEEDTOBEREASSESSEDTOPROACTIVELYMANAGESPILLOVEREFFECTSFROMOTHERSNEGATIVEPERFORMANCEINTHEECOSYSTEMWHILENONEOFTHESEARENEWRISKS,THEFACTTHATINSTITUTIONSWILLLIKELYHAVETODEALWITHABROADERNETWORKOFPROVIDERSANDPARTNERSIMPLIESTHATMANAGINGBOTHDIRECTANDINDIRECTRISKSWILLBEMOREIMPORTANTINTHEFUTURE11INTHISNEWORGANIZATIONALPARADIGM,MAINTAININGANORGANIZATIONALIDENTITYANDCREATINGACOHESIVECULTUREANDEMPLOYEELOYALTYWHENMOSTOFTHETALENTISNOTINHOUSEWILLBEANENTIRELYNEWCHALLENGEINOUR6VIEW,AMOREGLOBAL“EXFORCE”EXTERNALTALENTWILLNECESSITATEGREATERCULTURALSENSITIVITYANDTHEWILLINGNESSTOBEMOREFLEXIBLEWITHWORKPROTOCOLSBANKINGREIMAGINEDHOWDISRUPTIVEFORCESWILLRADICALLYTRANSFORMTHEINDUSTRYINTHEDECADEAHEADBRANDSINTHEBANKINGINDUSTRYSEEMTOBEFACINGANEXISTENTIALCRISISITWASNTLONGAGOTHATBANKINGBRANDSWEREONPARWITHMOSTOTHERINDUSTRIESINTERMSOFCONSUMERTRUSTANDBRANDVALUE12THEFINANCIALCRISISCHANGEDTHATMANYBANKINGBRANDSHAVEYETTORECOVERFROMTHEREPUTATIONALDAMAGEEXPERIENCEDDURINGTHECRISIS13BANKS,EVENYEARSPOSTCRISIS,REMAINONEOFTHELEASTTRUSTEDINSTITUTIONS14WHENCOMPAREDTOOTHERINDUSTRIES,BANKSHAVEEXPERIENCEDTHELEASTGROWTHINBRANDVALUEOVERTHELAST10YEARS15THISISALLTHEMOREDISTURBINGGIVENTHEIMPORTANCEANDRELEVANCEOFTHEBANKINGINDUSTRYTOTHEECONOMYANDSOCIETYAMONGBANKSTHEMSELVES,SOMEHAVELOSTTHEIRLUSTERDUELARGELYTONEGATIVEPERCEPTIONSFROMTHECRISIS,WHILEOTHERNEWNAMESHAVERISENWELLSFARGO,FOREXAMPLE,DIDNOTEVENMAKETHETOP100LISTOFGLOBALBRANDSIN2006,BUTISNOWCONSISTENTLYRANKEDASTHEMOSTVALUABLEBANKINGBRANDBYSEVERALSOURCES16ACCORDINGTOMILLWARDBROWNSBRANDZSCORES,EVENTHOUGHTHEREWERE22BANKINGBRANDSINTHETOP100MOSTVALUABLEGLOBALBRANDS2015,THEIRCOMBINEDBRANDVALUE546BILLIONISLESSTHANTHATOFTHETOPFOURTECHNOLOGYBRANDSINCLUDINGAPPLE,GOOGLE,ANDIBMINCREASINGLY,THEBRANDSTHATAREABLETOELICITSTRONG,POSITIVEEMOTIONSAMONGCONSUMERSARETHEICONSOFTECHNOLOGY,BECOMINGTHESTANDARDBEARERSOFBRANDEQUITYINTHENEWDIGITALWORLDWHATWILLBETHEROLEOFBRANDSINTHEBANKINGINDUSTRYINFIVETO10YEARSASWEPOSITEDEARLIER,THEBANKINGINDUSTRYWILLBESIGNIFICANTLYTRANSFORMEDINTHENEXTFIVETO10YEARSDIGITIZATION,AUTOMATION,ANDDISINTERMEDIATIONWILLBETHEMAINDRIVERS,ANDTOGETHERWITHOTHERDISRUPTIVEFORCES,COULDALTERHOWBANKINGPRODUCTSAREDELIVEREDANDEXPERIENCEDINAWORLDWHEREDIGITALEXPERIENCESOFTENDOMINATE,HOWCANBANKSCONVEYTHEIRDISTINCTIVENESSANDINFLUENCECUSTOMERBEHAVIORWEBELIEVEBRANDEXPERIENCEWILLBECOMEINCREASINGLYFRAGMENTEDANDIDIOSYNCRATIC,WITHCUSTOMERSINGREATERCONTROLOFHOWANDWHENTHEYWANTTOENGAGEWITHBANKSASCONSUMERSWITNESSMOREONDEMANDSERVICESINOTHERINDUSTRIES,THEYWILLEXPECTTHESAMEINBANKINGASWELLINTHISENVIRONMENT,CONVEYINGACONSISTENTBRANDEXPERIENCEWILLBECOMEMORECHALLENGINGMARKETERSWILLBEFORCEDTOBEMORECREATIVEINTHEDESIGNOFSERVICEEXPERIENCESWHILEBANKSMAYHAVELESSCONTROLOVERHOWCUSTOMERSEXPERIENCETHEBRAND,THEYWILL,HOWEVER,HAVEACCESSTOMOREDETAILEDANDREALTIMEINFORMATIONATANINDIVIDUALCUSTOMERLEVELTHESENEWDATAWILLVASTLYEXPANDTHEABILITYTOTAILOROFFERINGSANDEXPERIENCESYETTHISEXPLOSIONINDATAISADOUBLEEDGEDSWORDFORBANKS,ASITWILLALSODEMANDTHATBANKSINCREASETHETRANSPARENCYOFTHEIRMARKETINGACTIONSCUSTOMERSWILLDEMANDAHIGHERLEVELOFPRICINGTRANSPARENCY,MAKINGCOMPARISONSHOPPINGEASIER,ANDFORCINGBANKSTOARTICULATETHEIRVALUEMOREEFFECTIVELYMILLENNIALS,INPARTICULAR,WILLCONTINUETOBEFARLESSINFLUENCEDBYBANKINGBRANDS17ASARESULT,BANKSMAYHAVETOEXPANDANDEVOLVETHEIRBRANDPROMISETOMEETTHESECHANGINGVALUESLIKEWISE,FUTURETALENTWILLALSOBELESSINFLUENCEDBYINSTITUTIONSHISTORICBRANDPOWER,ANDINSTEADMOREBYTHEIRSOCIALMISSIONANDVALUESTOMEETTHESEEXPECTATIONS,BANKSMAYNEEDTOSPENDMOREONTHESOCIALLYRESPONSIBLEINITIATIVESTHATTHEIRCUSTOMERSANDEMPLOYEESCAREABOUT,ELEVATINGCORPORATESOCIALRESPONSIBILITYTHROUGHOUTTHEIRORGANIZATIONSFUTUREOFBRANDSNEEDFORDIGITALSAVVYANDASHARPERFOCUSONCUSTOMEREXPERIENCE6BANKINGREIMAGINEDHOWDISRUPTIVEFORCESWILLRADICALLYTRANSFORMTHEINDUSTRYINTHEDECADEAHEADSPECIFICRECOMMENDATIONSBANKSSHOULDDEVELOPACLEAR,CONSISTENT,ANDSUSTAINABLEBRANDSTRATEGYTHATISIMPERVIOUSTOTEMPORARYSHIFTSINCONSUMERPERCEPTIONSTHISCANONLYHAPPENWHENBRANDMANAGEMENTBECOMESACOREDISCIPLINEWITHINBANKSELEVATINGTHEROLEOFTHECHIEFMARKETINGOFFICERANDPROVIDINGTHERESOURCESNECESSARYTOSHEPHERDTHEBRANDISANECESSITYINTHETRANSFORMATIONTOAMOREDYNAMIC,CUSTOMERCENTRICORGANIZATIONTHEFIRSTSTEPINTHISPROCESSISREESTABLISHINGTRUSTDEVELOPINGRELEVANTINSIGHTSREGARDINGBRANDPERFORMANCEBYANALYZINGDIVERSEDATASETSWILLBECOMEMOREIMPORTANTTOMAINTAINACONSISTENTBRANDIDENTITYINAFRAGMENTEDEXPERIENCE,BANKSSHOULDDOABETTERJOBINTEGRATINGBRANDINGACROSSALLCHANNELSANDREINFORCETHEDIFFERENTIATINGBRANDATTRIBUTESTHISTASKMAYBEEASIERSAIDTHANDONE,BUTBYINVESTINGINTHESEPROGRAMS,BANKSCANDERIVETREMENDOUSVALUEANDCANMAINTAINCONTROLOVERTHEIRBRANDSASPARTNERSHIPSWITHOTHERFIRMSINTHEECOSYSTEMBECOMEMORECOMMON,BANKSSHOULDPAYCAREFULATTENTIONTOTHEPOTENTIALBRANDASSOCIATIONSFLOWINGFROMTHESETIEUPSINTHISREGARD,THEYWILLNEEDTOCHOOSEPARTNERSWHOSEBRANDVALUESARECONSISTENTWITHTHOSEOFTHEINSTITUTIONBANKSTHATAREABLETOANTICIPATETHEEMERGINGNEEDSOFTHEPOSTMILLENNIALS“GENERATIONZ”ASTHEYCOMEOFAGEWILLHAVEANUPPERHANDNOWISTHETIMETOTHINKTHROUGHWHATCUSTOMEREXPERIENCEMODELWILLWORKBESTFORTHEM,ASTHEOLDESTMEMBERSOFTHISGENERATIONAREJUSTABOUTTOENTERCOLLEGEORBECOMEFULLTIMEWORKERSANDASCONSUMERSYMPATHYFORSOCIALMISSIONSBECOMESMOREPRONOUNCED,BANKSWILLNEEDTOSELECTIVELYPARTICIPATEINTHESECONVERSATIONSASWELL,THROUGHSOCIALMEDIAOROTHERCHANNELSASWEHAVEALREADYWITNESSED,ANYSLIPUPSWILLBEAMPLIFIEDTHROUGHSOCIALMEDIA,ANDBANKSWILLNEEDTOBERESILIENTINHOWTHEYPROTECTTHEIRBRANDFROMATTACKSONMULTIPLEFRONTSLASTLY,ASCONSUMERATTENTIONSPANBECOMESMORECOMPRESSED,COMMUNICATINGANDREINFORCINGBRANDBENEFITSWILLBECOMETHATMUCHHARDEROURPREDICTIONBUILDINGSUSTAINABLEBRANDEQUITYINANINCREASINGLYDIGITALWORLDWILLBECOMEEVENMOREIMPORTANTBANKSHAVEALOTOFBRANDINGCATCHUPTODOINORDERTOCOMPETEWITHTECHNOLOGYBRANDSSUCHASAPPLEANDGOOGLEBRANDEQUITYINTHEINDUSTRYWILLALSOINCREASINGLYFLOWFROMPARTNERSHIPSWITHOTHERSINTHEECOSYSTEMSERVICEDIFFERENTIATIONANDCUSTOMEREXPERIENCEWILLINCREASINGLYBECOMETHEMAJORDECIDINGFACTORS7BANKINGREIMAGINEDHOWDISRUPTIVEFORCESWILLRADICALLYTRANSFORMTHEINDUSTRYINTHEDECADEAHEAD8TRUSTEDINTERMEDIARIESHAVEBEENFUNDAMENTALLYNECESSARYTOFACILITATINGPAYMENTTRANSACTIONSINMODERNTIMESASTRANSACTIONSBECAMEMORECOMPLEX,SODIDTHEIMPORTANCEOFINTERMEDIARIESINTHEPAYMENTSWORLDBUTMORERECENTLY,BLOCKCHAINTECHNOLOGIESARECHALLENGINGTHISBASICWORLDORDERCONCURRENTLY,THEGROWTHOFMOBILEPAYMENTSANDTHEPUSHTOWARDREALTIMEPAYMENTSAREFORCINGTRADITIONALPLAYERSTOREEXAMINETHEIRROLEINTHEPAYMENTECOSYSTEMTHETHREATOFDISINTERMEDIATIONINTHEPAYMENTSINDUSTRYISBOTHREALANDIMMINENTTHEPAYMENTSINDUSTRYHASTHREECHARACTERISTICSTHATAREATTRACTIVETOPOTENTIALDISRUPTERSFIRST,ITISAMASSIVEINDUSTRY,WITH26TRILLIONINGLOBALTRANSACTIONSANDBILLIONSOFDOLLARSINFEESFORTHEPAYMENTNETWORKS,PROCESSORS,ISSUERS,ANDOTHERINTERMEDIARIES18SECOND,INEFFICIENCIESABOUNDINALMOSTEVERYSTEPOFTHEPROCESSLEGACYARCHITECTUREANDDECADESOLDPROTOCOLSCREATEDELAYS,RISKS,ANDHEADACHESFORALLCONCERNED,INBOTHCONSUMERANDCORPORATEPAYMENTSTHIRD,CUSTOMERSCHERISHCONVENIENCE,SOANYSOLUTIONENHANCINGTHISATTRIBUTEWITHOUTMUCHADDITIONALCOSTWILLBEFAVORABLYRECEIVEDITSASMALLWONDERTHATTHEPAYMENTSWORLDHASATTRACTEDCOUNTLESSPOTENTIALDISRUPTERS,WITHSOMANYTHATTHESPAC