Banking
THE LAW OF THREES: BANKING’S NEW COMPETITIVE LANDSCAPE
Published by Gbaf News
Posted on August 19, 2017
11 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Gbaf News
Posted on August 19, 2017
11 min readLast updated: January 21, 2026
By Alex Gallina, Director, Finance and Banking Solutions at Jive Software, an Aurea Company
Even those who don’t believe the adage “everything comes in threes” may find themselves subconsciously seeking evidence for it. For instance, when a pair of beloved celebrities pass away in quick succession, do you ever find yourself wondering, “Who’s next?” It’s not your fault. This so-called “rule of threes” is so ubiquitous – the Holy Trinity, the three-act structure in screenwriting and the rule of thirds in photography – it can turn even the most skeptical of heads. For leaders in the financial services industry, a particular triad is looming large.
The game-changing triple threat
Brexit, along with a pair of new regulations aimed at the financial services industry – GDPR and PSD2 – have far-reaching implications not only for banks, but their employees and customers as well.
Brexit
Since its passage last year, the question, “What happens next?” has been front and center in the Brexit debate. So far, the answers have been far from clear. One thing is for sure: if there’s one thing bankers dislike above all else it’s uncertainty. It will lead to higher turnover and an increased lack of employee engagement. Nearly half of UK workers are concerned about their job security, while over a third worry about the implications of Brexit on their personal lives. Labour shortages are likely.Competition for suitable candidates will increase in financial services along with greater competition in the overall UK employment market, not least because of a likely redistribution in where those skilled workers, and the companies reside.
GDPR
Touted as “the most important change in data privacy regulation in 20 years,” the EU’s General Data Protection Regulation, or GDPR, is set to take effect in May 2018. Designed to improve data protection for consumers and to streamline rules across the EU, GDPR will have significant and profound repercussions for financial institutions, including steep penalties for non-compliance. Among other consequences, GDPR will predicate a huge focus on data privacy – not only in justifying the customer data financial organisations collect, but in the way they manage and protect it.Its impact will be far-reaching. Data is attached to EU citizens and companies alike thus making Brexit a moot point in avoiding GDPR compliance.
PSD2
When the second Payment Services Directive – known as PSD2 – comes to pass next year, competitive threats in banking are going to become far more prevalent and sophisticated than they are today. “Agility will be key to keeping market position” for banks, according to a new Deloitte report. [pdf] Note the author’s verb choice. Not “gaining,” “growing” or “increasing,” but “keeping.” That’s because, among other things, the regulation opens financial services to outside competitors (including heavyweights like Facebook and Google, as well as countless fintech startups) who can then offer financial products and services directly to consumers without adhering to the regulatory and infrastructure requirements traditional institutions must abide by. It will force banks to make steep investments in both the new security requirements and in opening their APIs. And at the same time, they’re expected to lose up to 9 percent of their retail revenue by 2020.
Good things always come in threes
If the news sounds bleak, it is – unless banks can adapt. Fortunately, the rule of threes doesn’t only apply to tragedies and challenges, it can refer to opportunities as well. Collaboration, communication and transparency can help financial institutions face upcoming threats, as well as address numerous other business cases.
Fintechs will have to make a compelling case to attract customers away from banks.Banks, on the other hand, must discover new and innovative ways to delight their current clients. Recent drafts of PSD2 leave it to each new PISPto determine its own API interface. As we’ve seen repeatedly in numerous other industries, this initial lack of standardisation will initially lead to massive fragmentation. Because communication, collaboration and transparency are the enemies of fragmentation, banks that embrace such an approach will have the upper hand and can immediately jump out ahead of new competitors. However, they’ll only be able to take advantage of those opportunities by shoring up their own technology efforts.
Fighting fragmentation with collaboration
“Innovation is imperative,” according to PwCs new Retail Banking 2020 report. It states, “Technology will change everything – becoming a potent enabler of increased service and reduced cost.” According to the report, there are six priorities if retail banks are to win in the coming years; as follows:
Mastering collaboration, communication and transparency – both internally and externally, with partners and customers, is critical to all of these objectives. A collaboration hub can help retail banks re-engineer themselves from the inside out to address all six concerns. A hub solution merges robust internal communication with the ability to seamlessly connect and collaborate with outside entities such as partners, vendors, contractors and customers. It’s also the only single solution that provides the security features necessary to ensure compliance with the regulations of today as well as those of tomorrow. Banks can compete with technology startups on their own playing field, enhancing their agility, promoting thought leadership and speeding time to market. That includes attracting top talent.
Today’s digital workplace requires employees to move effortlessly between teams and take on ever-changing roles, and a collaboration solution offers the dynamic on boarding and increased informal training necessary in this kind of modern business envioronment. By getting workers up to speed faster, they’re more engaged, more productive and better focused on the road map ahead instead of mired in the mistakes of the past.
A patchwork of conversation apps and stack offerings may promise the moon, but as many organisations eventually learn, those assurances are largely stardust. A collaboration hub integrates with many of those same tools to free up even more siloed information, thus opening up an organisation’sworkgraphand filling its coffers with valuable corporate memory – and, ultimately, cash as well. They’ll need it, too, as they’ll soon be competing with tech companies as well as each other to survive. A collaboration hub is the secret sauce that will not only help banks survive, it will ensure they thrive into the next decade and beyond.
By Alex Gallina, Director, Finance and Banking Solutions at Jive Software, an Aurea Company
Even those who don’t believe the adage “everything comes in threes” may find themselves subconsciously seeking evidence for it. For instance, when a pair of beloved celebrities pass away in quick succession, do you ever find yourself wondering, “Who’s next?” It’s not your fault. This so-called “rule of threes” is so ubiquitous – the Holy Trinity, the three-act structure in screenwriting and the rule of thirds in photography – it can turn even the most skeptical of heads. For leaders in the financial services industry, a particular triad is looming large.
The game-changing triple threat
Brexit, along with a pair of new regulations aimed at the financial services industry – GDPR and PSD2 – have far-reaching implications not only for banks, but their employees and customers as well.
Brexit
Since its passage last year, the question, “What happens next?” has been front and center in the Brexit debate. So far, the answers have been far from clear. One thing is for sure: if there’s one thing bankers dislike above all else it’s uncertainty. It will lead to higher turnover and an increased lack of employee engagement. Nearly half of UK workers are concerned about their job security, while over a third worry about the implications of Brexit on their personal lives. Labour shortages are likely.Competition for suitable candidates will increase in financial services along with greater competition in the overall UK employment market, not least because of a likely redistribution in where those skilled workers, and the companies reside.
GDPR
Touted as “the most important change in data privacy regulation in 20 years,” the EU’s General Data Protection Regulation, or GDPR, is set to take effect in May 2018. Designed to improve data protection for consumers and to streamline rules across the EU, GDPR will have significant and profound repercussions for financial institutions, including steep penalties for non-compliance. Among other consequences, GDPR will predicate a huge focus on data privacy – not only in justifying the customer data financial organisations collect, but in the way they manage and protect it.Its impact will be far-reaching. Data is attached to EU citizens and companies alike thus making Brexit a moot point in avoiding GDPR compliance.
PSD2
When the second Payment Services Directive – known as PSD2 – comes to pass next year, competitive threats in banking are going to become far more prevalent and sophisticated than they are today. “Agility will be key to keeping market position” for banks, according to a new Deloitte report. [pdf] Note the author’s verb choice. Not “gaining,” “growing” or “increasing,” but “keeping.” That’s because, among other things, the regulation opens financial services to outside competitors (including heavyweights like Facebook and Google, as well as countless fintech startups) who can then offer financial products and services directly to consumers without adhering to the regulatory and infrastructure requirements traditional institutions must abide by. It will force banks to make steep investments in both the new security requirements and in opening their APIs. And at the same time, they’re expected to lose up to 9 percent of their retail revenue by 2020.
Good things always come in threes
If the news sounds bleak, it is – unless banks can adapt. Fortunately, the rule of threes doesn’t only apply to tragedies and challenges, it can refer to opportunities as well. Collaboration, communication and transparency can help financial institutions face upcoming threats, as well as address numerous other business cases.
Fintechs will have to make a compelling case to attract customers away from banks.Banks, on the other hand, must discover new and innovative ways to delight their current clients. Recent drafts of PSD2 leave it to each new PISPto determine its own API interface. As we’ve seen repeatedly in numerous other industries, this initial lack of standardisation will initially lead to massive fragmentation. Because communication, collaboration and transparency are the enemies of fragmentation, banks that embrace such an approach will have the upper hand and can immediately jump out ahead of new competitors. However, they’ll only be able to take advantage of those opportunities by shoring up their own technology efforts.
Fighting fragmentation with collaboration
“Innovation is imperative,” according to PwCs new Retail Banking 2020 report. It states, “Technology will change everything – becoming a potent enabler of increased service and reduced cost.” According to the report, there are six priorities if retail banks are to win in the coming years; as follows:
Mastering collaboration, communication and transparency – both internally and externally, with partners and customers, is critical to all of these objectives. A collaboration hub can help retail banks re-engineer themselves from the inside out to address all six concerns. A hub solution merges robust internal communication with the ability to seamlessly connect and collaborate with outside entities such as partners, vendors, contractors and customers. It’s also the only single solution that provides the security features necessary to ensure compliance with the regulations of today as well as those of tomorrow. Banks can compete with technology startups on their own playing field, enhancing their agility, promoting thought leadership and speeding time to market. That includes attracting top talent.
Today’s digital workplace requires employees to move effortlessly between teams and take on ever-changing roles, and a collaboration solution offers the dynamic on boarding and increased informal training necessary in this kind of modern business envioronment. By getting workers up to speed faster, they’re more engaged, more productive and better focused on the road map ahead instead of mired in the mistakes of the past.
A patchwork of conversation apps and stack offerings may promise the moon, but as many organisations eventually learn, those assurances are largely stardust. A collaboration hub integrates with many of those same tools to free up even more siloed information, thus opening up an organisation’sworkgraphand filling its coffers with valuable corporate memory – and, ultimately, cash as well. They’ll need it, too, as they’ll soon be competing with tech companies as well as each other to survive. A collaboration hub is the secret sauce that will not only help banks survive, it will ensure they thrive into the next decade and beyond.
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