Register +

The threat to traditional banking is growing. From PayPal to peer to peer lending, methods of money management outside of traditional banks have boomed in the last few years. While evidence that they're creating competition that threatens banks' foothold in the economic market is still growing, they are expanding options and forcing banks to think smarter as customers begin exploring new ways of storing, transmitting and growing their money. And peer to peer lending and other programs certainly have banks' attention. In recent comments, the CEO of the Canadian Imperial Bank of Commerce confirmed that banks will have to adjust to new competition from peer to peer and other markets. Victor Dodig said the bank is looking for ways to leverage interest in Bitcoin and other new technologies to its benefit. "“We can play in that space,” Dodig says. "Will clients move in droves to these new technology platforms to do their lending? I don’t think so." But, he adds, "Competition always changes the dynamic on pricing. Will there be pressure over time? Of course there will be." Other platforms, like Apple Pay and Google Wallet, have facilitated millions of transactions around the world. Executives from Accenture noted that "As banks recover from the downturn, non-banks are taking advantage by proceeding aggressively with digital innovations and capturing more and more of the banking value chain. Accenture estimates that competition from non-banks could erode one-third of traditional bank revenues by 2020." Digital wallet services from Google, Apple, Samsung and more have become part of people's daily payment processes. Each has slightly different offerings in terms of security, ease of use, and compatibility with different devices, digital apps and services. Google continues to tweak Wallet, since it hasn't been as successful as originally predicted. Of course, many such services integrate directly with bank accounts and existing credit cards, functioning more as an intermediary than an entirely new money management method. Dodig argues that one deterrent for new financial systems like peer to peer is ongoing uncertainty about security and financial regulations: “Clients that have money with an institution want to make sure that it’s stable and secure, because (deposit) insurance only gives you protection to a certain level,” said Dodig. However, over time, regulations are becoming clearer and alternative financial models are demonstrating their success and security. rebuildingsociety's Digital Marketing Manager, Adam Knott, said: "Banks are keeping a keen eye on institutions like rebuildingsociety.com, because they realize the potential for disruption and competition as more individuals and organizations reduce their reliance on traditional banking."