Remake of BST by Sue Walsh https://padlet.com/suewalsh1/h88hlh2c0ybqzic5 Made with a quick smile en-us 2021-09-03 13:32:43 UTC 2021-09-03 14:56:29 UTC hello@padlet.com I think I'dve just finished with recognising that many new banks were therefore entering the market https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715311799 The threat of new entrants is a factor which is often dictated by the levels of barriers to new entrants that exist. Through the new technology that is existent from the open banking software, there is no long a requirement for the level of capital that would have been traditionally required to start a bank. Companies can now utilise the data from traditional banks to offer products which differ from the traditional lending and deposit business model. Theses traditional products require a significant amount of capital and infrastructure, whereas, the new products from challenger banks simply require a good idea and an element of technological know-how to be able to create an app for the consumers. 

]]> 2021-09-03 14:05:47 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715311799 https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715312755 Challenger banks in themselves represent a clear substitute to the traditional bank. Through a consumer signing up to a challenger bank, they are expecting to receive a different product to the one which they would have expected traditionally. This new product aims to provide a higher level of analysis on a customer’s financial situation rather than just providing a place for someone to keep their money and earn interest. This threat of substitutes has clearly increased from where it was in the recent past, and the higher threat of substitutes has forced the traditional banks to start to consider offering the same services as the challenger banks that are starting to substitute them. 

]]> 2021-09-03 14:06:14 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715312755 It is vital for a company to adapt to the requirements of the customer. This is because a customer is far more likely to purchase and item if it is aligned with their requirements. As such, customers wanting a more innovative way to perform their transactions and utilise the banking service will drive in the industry for this form of innovation.Therefore, VB will have to adapt in order to make the most of this transition. https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715312786 2021-09-03 14:06:15 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715312786 Whilst previously customers would have been tied up with a traditional bank, who would have controlled their account and payment information, open banking provides customers with power over their own accounts and data. The open data platform allows customers to give authorised access to third parties on all information possessed by the bank. This reduces switching costs for customers, who can easily switch banks without the previous obstacles. As customers are able to switch easily, the industry is likely to become more competitive, with some customers targeting a specific quality in a product or service, and others targeting a wide range of products or services. https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715312881 2021-09-03 14:06:18 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715312881 In particular to the internet system of things (it's just called the Internet of Things IOT - sue) whereby as the internet is further embedded into everyday objects, this has allowed for a push for more features in day to day life to be integrated into this system. This has allowed for a shift in demand for integration.However, there is still reservation on grounds of data security and privacy in adoption of the technology development. Additionally, due to existing structures and habits, there exist a group inertia within the consumers to adapt to the change. https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715313160 2021-09-03 14:06:25 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715313160 https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715313333 As part of the PESTEL model (political, economic, social, technological, ecological, legal), technological advances in the macro environment can be seen to be making changes to industries on a significant scale. In the instance of the European banking industry, it is clear that the open banking API is a piece of new technology which is enabling the sector to evolve and change. It allows challenger banks to access the traditional banks’ data in a way which would not have been possible in the past, allowing them to offer products to the customers which would not have existed previously. 

]]> 2021-09-03 14:06:30 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715313333 One of Porter’s Five Forces is the threat of new entrants into a market. Typically, where there are significant barriers to entry, there will be less competition because fewer players can enter that market. The use of open banking gives instant access to bank databases, and therefore the new entrants are able to bypass the most significant barriers to entry and can enter the market and gain an immediate market share, this is because they do not require any infrastructure, and can essentially perform the service remotely. One significant barrier to entry in the digital banking market is that Motan have acquired a banking licence, and may be looking for exclusivity. https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715313368 2021-09-03 14:06:31 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715313368 https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715314004 Under the legal changes of Europe’s new banking regulations, has enabled the rise of ‘digital challengers’.  

This is because companies other than banks can now have access to banks’ databases and therefore can enter the financial services market.

If digital challengers can meet customer requirements in a more innovative way than traditional banks than they have a chance of rivalling the traditional banks for their customers. A recent report suggests traditional banks may lose up to 31% of profits to these digital challengers.

]]> 2021-09-03 14:06:50 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715314004 The key external factor here would be the impact of technology development on the banking industry. The development in technology such as cloud based platforms, data security and the internet system of things has allowed for the bank industry to fully adapt to these features.The development of data protection and data privacy has provided assurance to customers and companies to adapt to new technology.Additionally, the development of cloud based platforms which enables data sharing over a secured network has open up innovation into data analytics of financial data which is enabling the change https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715314439 2021-09-03 14:07:03 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715314439 Due to the new Open banking rules, which requires all banks to create an open data platform, new entrants now have instant access to banks’ databases to immediately enter the market. Before these rules, larger banks had a monopoly on the customers’ accounts, which acted as barriers to entry for smaller, innovative firms. Despite the barriers to entry reducing, banks are still required to obtain a banking licence in Europe. This may provide issues for new start-up companies who are unable to prove that they have appropriate security to protect against fraudsters. Ultimately, the threat of new entrants is a major factor for change in the banking industry as a result of the open banking rules and removal of barriers to entry. https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715314479 2021-09-03 14:07:04 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715314479 External Factor 1: Digital Challengers. The rise of digital challengers (‘DC’) is changing the industry. The DC have lowered the barriers to entry as now firms with technological capabilities can rival the services offered by banks. Therefore increasing the threat of new entrants. Obviously, technology advancement is a key driver for this change as well as the political and legal factor of the new European regulation requiring an open data platform with third party access. This change is diminishing existing banks competitive advantage. Through their technological expertise, DC are able to innovate in a more creative way than existing traditional banks. In terms of traditional banking, this represents an increase threat of substitutes and competitive rivalry. https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715321279 2021-09-03 14:10:15 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715321279 New government legislation brought in after the 2008 banking crisis has helped facilitate the advent of digital banking, through a requirement that banks create open data platforms. This change has removed a significant barrier to entry for new players, as financial data on banks customers is available to all, if customer consent is provided, and so digital banks can see who to target with marketing for their financial services. While many are still apprehensive about sharing their financial information with third parties, recent studies suggest banks may lose up to 31% of their profits to these new entrants. https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715326034 beware of retyping too much from the scenario. think about what you can say in ADDITION to the scenario - 'adding value' ie your own thoughts/words. you would prob get half mark for this]]> 2021-09-03 14:12:27 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715326034 Another external factor is the fraud risk. In the old banking system it can be assumed that there is a greater risk of fraud/ hacking.This is because the new banking systems will utilise open data platforms. These platforms (as well as blockchain) are more secure as anyone is able to access the data, but no one is able to edit it or adjust it. As such, there is no potential for hackers to implement ransomware or hack into personal data.Therefore, this is driving change in the industry as the companies are required to revamp their tech in order to not be vulnerable to attacks. https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715328905 You popped in lots of knowledge - which I also did in my answer. you did tell me about change. my only concern is that you have not 'referred to relevant models' in this bit]]> 2021-09-03 14:13:47 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715328905 While many are still apprehensive about sharing financial information with third parties, digital banks have responded to the needs of younger customers by giving them rapid access to their banking on their phones. As reliance on traditional banking practices has waned, the power of customers has grown to be able to take control of their own finances through mobile banking. There are far more products available to choose from in terms of current accounts and credit cards, allowing customers to shop around and not be beholden to traditional banks. https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715336487 2021-09-03 14:17:21 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715336487 A recent industry report states that consumers are increasingly demanding a digital approach. However, a spokesman for the banking sector in suggests reluctance to change existing banking habits which may reduce the ability for digital challengers to enter the industry. Individually consumers are not very powerful but if everyone is not keen to share their bank account information then digital challengers may struggle to gain enough customers to stay in the industry. https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715337248 this is OK - just beware of not spending too long setting the scene. It was only your last sentence that generated the actual mark]]> 2021-09-03 14:17:43 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715337248 The development of the technology industry as well as the low barriers to entry has also created strong competition within technology firms who have focus on the financial market.As mentioned above, with increasing integration of functions into technology, there has also shift in the ecnomic sphere to take advantage of new technology for efficieny and cost reduction purpose.As the industry life cycle of the bank industry is being extended by technology innovation, new entrants to this market is forcing the previous firms to transform the industry in order to remain profitable in the industry https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715337653 2021-09-03 14:17:55 UTC https://padlet.com/suewalsh1/h88hlh2c0ybqzic5/wish/1715337653