Now, banks face new tech-threat

NEW DELHI: In a story about friends turning foes, technology has turned predator for the financial services sector with the advent of new computing platforms such as blogs, search engines and review forums, a global research firm said.

The financial decisions of tech-savvy consumers are increasingly being influenced by these next-generation technologies rather than the traditional advertising and promotional campaigns, global research firm Forrester said in a report on impact of this new trend on the financial services.

These technologies are heralding a new era called "Social Computing", which allows consumers to share information on various topics that invariably influences their decision for buying products and services ranging from a mobile phone to credit cards and bank accounts.

As consumers use the internet to share information, it empowers individuals at the expense of retail financial services firms, Forrester said.

Meanwhile, the risks of financial brands being undermined increases as the marketers lose control of the message, the report said.

A Forrester Research study shows that people increasingly rely on information from each other, rather than the financial institutions and this trend further increases the implications of social computing for the financial service providers.

However, the value of financial brands is being eroded, as these technologies make it "increasingly difficult for firms to craft beautiful advertising campaigns that bear no resemblance to the daily reality of customers' experiences with the firm," Forrester said.