Businesses can’t function if they don’t have customers. When customers find other solutions and move away, it’s therefore a threat to business continuity. Conventional banks may be at risk if a new development in online-only banking takes off. Startup ‘Simple’ (that’s the company’s name) for instance is giving clients an innovative alternative. Its solution is to eliminate fees, move all the banking activity to the Internet and offer online apps to help track budgets and finances. It makes its money from interest charges and internetwork payments, but can work with lower margins than conventional bricks-and-mortar banks that must pay for the operation of high street branches. Is this the end of the old-style banks?
Probably not, as long as the old-style banks react to keep pace with changes in customer requirements. Even if Simple thinks that that conventional banks are slow to change, the banking landscape is unlikely to change dramatically in the near future because of its new online service. Banks have already started offering Internet banking to customers, albeit with the same fee structures as before. If push comes to shove, they may well develop spin-off corporations that are self-contained online units, much as insurance companies and large supermarket chains have done. Whether these online ventures sink or swim, the banks will then be covered.
What is of interest to organisations in general however is to see how banks (and insurance companies, supermarkets, and other large corporate entities) react to ensure business continuity both in the short term and the long term. There are valuable lessons to be learned here, both from companies that got it wrong (Barings Bank ruined by rogue trading, for instance) and those who got it right (HDFC, India’s most valued bank and in the top four or five worldwide). Good business continuity stretches across the entire spectrum from real time, millisecond IT security to adapting to trends that span five, ten or more years.