Banks Feel Pressure to Globalize and Offer New Services for Consumers

Banks Feel Pressure to Globalize and Offer New Services for Consumers

IBM (NYSE: IBM) today announced the results of a global research report that reveals the banking industry is counting on new market expansion, particularly in emerging markets, to fuel growth and efficiency opportunities over the next five years, yet banks say they are not prepared to seize these opportunities.

The report, “No Bank is an Island: Get Global Before Globalization Gets You,” indicates 69 percent of banking executives acknowledge their organization is not operating in a globally integrated fashion. As a result, few banks are positioned to effectively operate outside their domestic markets or compete in key emerging markets such as China, South Korea, India, Ireland, and Turkey where demand for new banking products and services is set for rapid growth.

“The worldwide financial system is expected to quadruple to (US) $1,300 trillion by 2025,” said Shanker Ramamurthy, global industry leader, banking and financial markets, IBM Global Business Services. “Banks of all sizes are feeling the effects of globalization as rising cross-border banking M&A and the proliferation of non-bank, online and mobile banking providers increases competition for customers. The question is: what role will traditional banks play in a globally integrated industry? And will they be able to adapt their business models to take advantage of globalization? We believe banks that specialize and collaborate with other players both within and outside the industry to meet specific consumer needs in various markets will be best positioned for growth.”

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