Michal Kissos Hertzog, CEO of Pepper

There is uncertainty in the financial services sector about what makes a bank truly digital, a leading executive from the mobile banking sector has claimed.
Michal Kissos Hertzog is CEO of Pepper, the 100% mobile bank created by leading Israeli institution Bank Leumi: “We recently conducted a study of 50 C-suite and director level decision-makers at UK retail banks and found a clear confusion about what makes a digital bank ‘truly digital’,” she said. “Almost a fifth of decision-makers at banks consider any bank with a mobile app to be ‘truly digital’ while three quarters also believe that a bank created from scratch with a core digital infrastructure is truly digital.”
This disparity at the top, she said, presents one of the biggest challenges as the industry works to embrace a digital future: “Technology is a fantastic tool but we believe that our culture – which is focused on putting customers and their banking experience at the heart of everything we do – is the real hero,” concluded Hertzog. “That is the challenge facing traditional banks – how to change decades of a culture focused on cost-cutting and deliver a truly innovative digital experience and value built with the customer in mind.”
Pepper’s research also showed that 64% think that Open Banking regulations have given tech giants, like Amazon and Google, an advantage over traditional banks, while 58% said that Open Banking has had a negative impact on their organisation since its introduction. Some 82% admit that UK retail banks aren’t innovating fast enough, while 48% feel that UK banks are three or four years behind fintech competitors. A third of respondents thought traditional banks in their current form will effectively cease to exist by 2023.
“Clearly financial decision-makers feel that Open Banking has opened the door to tech giants to jump into the retail banking space, but this must not be feared,” said Herzog. “Open Banking can create a real revolution that benefits traditional banks, not only the huge tech companies. In my view, it won’t end in a ‘winner takes all’ scenario, like in other industries.”

by Guy Matthews
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