Global Central banks Free Essay Example

Introduction:

–Banking is no longer somewhere you go, it’s something you do

Essay writing service:

• Excellent quality
• 100% Turnitin-safe
• Affordable prices

Order Now

“Global Central banks have pumped $8.7tn into the banking system to ‘save the world’. Saving the banks has cost more money than it cost to fight WWII, the first Gulf War, put a man on the moon, clean up after last year’s Japanese Tsunami, and the entire African aid budget for the last 20 years all put together.”

David McWilliams, PunkEconomics

In an era where my usage of mobile is more than watching tv, and where bookstores, video rental stores and other mainstays of the physical retail commerce are rapidly changing shapes, banks just appear to be old fashioned and outdated.

In a world where I’m more inclined towards texting, status update, upload a photo or use an app, instead of visiting a bank branch the change that was being pressed on bankers was not only an identity crisis, transparency that was being forced, and a battle for public opinion, but also a crisis of modality.

Working of retail banking was ready to change fundamentally at the interface of consumer, but the uncontrollable tone of the industry was both a rejection of that impression and a termination of changing consumer requirements at the same time. Bankers terminated the concept that the branch was being overtaken by digital interactions, and strengthened the importance of face-to-face interactions as superior when their only purpose was to justify their lavish physical infrastructure.

This situation led to emergence of new reality of banking. Banking was no longer introduced by a physical distribution network.

The system of banking that was emerging out of the global crisis would be one that was highly mobile, utilitarian, pervasive, and was smoothly engineered to work whenever and wherever it was needed. While the “demise of cash” which will still take many years until it becomes a reality, the mobile phone and Internet usage are causing a huge change in bank practices, distribution models and competitive landscape.

many of the banks that were household names during the 20th century will simply vanish as they are either amalgamated or displaced in the system-wide disruption that is approaching soon. Ownership of the customer experience is being taken by the emergence of new players through revolutionary new techniques that attack the periphery of payments and banking.

As far as number of active customers are concerned, PayPal is perhaps largest financial institution, grew vigorously by filling a gap in payments experience born out of a lukewarm industry reception to e-commerce, to become easily the dominant online payment provider.

Meanwhile, in developed economies like UK a new class of consumer emerged. This new class of consumer no longer needed a bank account to live and work in the system. In fact, millions of them abandoned their traditional bank relationships in favor of prepaid debit cards, PayPal accounts, mobile payments, and other such workarounds to a system that was coming apart at the seams. With $200 billion in prepaid debit cards in the US alone in 2011, this was not a minor blip, this signaled a fundamental change the rise of the “de-banked”.

Be assured this is disruptive and controversial. This is about as exciting as banking gets. Everything from this point on is changing. What you used to consider as banking historically is about to get, not just a makeover, but a complete reboot.

Changes in Customer Behavior

We’re looking forward to the appearance of a less-branch experience.

Question yourself this: when did you last venture into a branch as a customer? Do you visit on every weekly basis? Possibly every month? Have you visited a bank branch last year? Did you really want to go into the branch, or was it necessary only because of the bank’s own procedure? What is the importance of branch in day to day banking experience? In many ways, for the broader customer base branch has become the least important channel for day-to-day banking. Why is it so? Simple reason is because it is not producing desired results, difficult to reach and just not as applicable in today’s hustle-and-bustle, connected world, where value is measured in speed to market and responsiveness. With respect to statistics support for day-to-day branch banking has been waning for the last decade, but support for mobile and internet has been shooting up abruptly.

Bank of New York is the oldest branch in United States, founded on 9 June, 1784. As far as material aspects are