The most powerful force of all

With our deep capacity for adaptation, we don't even realize how our routines and behaviors are evolving. But a simple memory exercise is enough to confirm how much has changed in two decades.

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It is already a commonplace to say that technology is changing our lives. With our deep capacity for adaptation, we don't even realize how our routines and behaviors are evolving. But a simple memory exercise is enough to confirm how much has changed in two decades. Today, when we choose and book a hotel or a plane trip, when we look for the most trivial information or news about what is happening in the world, when we interact and communicate with family or friends, or when we listen to music or watch a series or a movie, we are doing it differently than we did a few years ago. The technological innovation that enables these changes has already profoundly changed many businesses and shifted centers of power. In just 10 years, the world's largest companies ceased to be oil and industrial companies and became technology-based companies.

A revolution of this magnitude in such a short space of time only happened because citizens massively embraced it. Because the new technological tools give them enormous convenience, comfort, and utility. But also because they gave them power they didn't have. More than ever, consumers today have possibilities for choice, comparison, decision, and public evaluation of products and services that they naturally use to their advantage.

We are already familiar with the business model changes caused in the media, urban mobility, the music and entertainment industry, communications, and the way we interact, to name just a few.

But there is another sector, one of the most powerful and structuring in any economy, that is now beginning to feel the impact of technological change: the financial industry, especially retail banking.

I have cited these data from an American study on other occasions, but I recall them because they are impressive: 70% of American millennials prefer to go to the dentist than to a bank; 33% believe they don't need a bank for anything; and half say that banks all offer the same thing. The data are unequivocal. Much is already changing in the financial sector and in its relationship with customers, but it is clear that we are still at the beginning of the revolution. Every day new players arrive who compete for important market shares – from electronic transfers to payment cards – and, above all, contribute to strengthening the power of choice for consumers, who always prefer what is most comfortable and convenient, especially if it is also cheaper and faster.

This path is irreversible. Open Banking is here, duly sealed and regulated by PSD2, the so-called second Payment Services Directive of the European Union. The interaction of technological platforms, duly authorized by customers, with their banking data will contribute to bringing more transparency, competition, and customer mobility between banks and banking products. The possibility of direct comparison between banking and financial products, often complex, is becoming effective. Negotiation with banks will be increasingly demanding. Competition between them will also be, both nationally and in the European banking market.

The amount of information available to customers for decision-making is increasing, and technological tools help to give it practical and quick utility. On the other hand, this brings new demands on individual or business customers, who must have levels of knowledge and financial literacy that allow them to level the balance in interaction and negotiation with banks.

These are new challenges for everyone, with the certainty that this will not stop. There are no laws or entry barriers that stop the digitalization of banking and our relationship with money. For a very simple reason: the main force for change comes from consumers and what they demand because it is more convenient for them. And that is the most powerful force of all.

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