Source: http://www.zdnet.com/article/a-look-into...

Jean Claude Rodríguez Ferrara, the creator of P2P lending platform Puddle.com, avoids euphemisms. "Banks are dead," he says.

Ignasi Martin, the coordinator of electronic banking at CaixaCatalunya, a Barcelona-based bank with 3.6 million customers, takes a more measured approach: "Banks of the future will have to be more than banks," he says.

Both men agree that banking is undergoing an unprecedented revolution spurred on by technology. Until recently, the industry enjoyed comfortably stable revenues, and flirted with new technologies and social trends without really developing a clear strategy around how to harness them. However, the recent eurozone economic crisis and the unstoppable rise of the smartphone have changed all that.

Now, with consumer habits changing and new players emerging, offering products where ease-of-use is front and centre, banks know they have to change. Having lasted for centuries in some cases, today's banks know they can't afford to stand still and get left behind - and that's where technology needs to come in.

Over a year ago, Francisco González, chairman of BBVA, a Spanish multinational banking group with operations in 30 countries and total assets of over €637m, admitted that "banking platforms are obsolete". BBVA has remodeled itself to become a "digital company providing knowledge services".

In March last year, the Spanish bank announced the creation of a digital banking division. The decision was based on a report by consultancy McKinsey, which found that digital transformation can increase a typical bank's income by 30 percent and cut its costs by up to 25 percent.