Google and Amazon the next competitors to banks? This is a recurring theme, which has been debated at length (here and here for example)
But banks competing with Google or Amazon, that is, shall we say, more daring… But this is exactly what happened last week, when Santander announced that it will offer cloud storage, therefore challenging directly the web giants.
Here are some thoughts on such a move by Santander:
– The rationale is that Santander wants to keep the relationship with their corporate clients – it makes sense, banks usually have a strong relationship with their clients, especially SMEs – and upsell other services, like cloud storage.
– Customers already trust a lot of their most private information to banks – so storing information can be seen as a natural next step.
– I’m not an expert in cloud computing, but I know it’s a cut-throat industry. Even Amazon had to cut its prices 50 (!) times in 6 years, so hard to see how to make money especially when you’re not a lean and mean web machine.
The most interesting aspect for me though is the strategic thinking that is starting to take place within banks. Banks will need to define their role and positioning in the digital world, where it will be much more challenging to offer all services to all clients. Going back to what a core value of a bank is, it does not seem that farfetched to offer secured storage when “safety”, “trust” and “reliability” are what customers expect from a bank. Whether competing in cloud storage is a wise business decision, that is another question.
This announcement by Santander is therefore an important milestone. It shows that some banks are realising that they will have to adapt, and more importantly are thinking very hard on what a bank should be in the 21st century. And instead of incremental changes, they are willing to take a deep hard look at their whole business model. Big strategy shifts are never easy, but it will be exciting to see what comes out of it.
