How can #privatebanks stay competitive?
Social media is bringing new competitors to the banking industry. Websites like Stockpickr help investors to shape their investment strategies and replace advisors. Even though many see such websites as small initiatives, together with the controversy and stigma associated with social media, it is undeniable that in the next 5 years, social media would be one of the most significant factor in shaping the success and competition of private banks.
World-renowned Prof. Michael Porter identified in his seminal work, “Competitive Strategy” 5 major forces that would shape competition and success for the players in the private banking sector:
- Threat of new competition
- Threat of substitute products
- Bargaining power of customers
- Bargaining power of suppliers
- Intensity of competitive rivalry
With social media, users can easily access information and as a result, it increases the bargaining power of the customers and the intensity of competitive rivalry is being intensified. However, the use of social media allow private banks a platform to influence their clients and a private bank would be not be at the cutting-edge as opposed to private banks who chose to use social media as a platform.
To network with other private banks, learn from your peers and uncover private banking strategies, come to 8th Annual Private Banking Asia 2012.
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Posted January 13, 2012 by jolene
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