Human Touch In Digital Disruption

Human Touch In Digital Disruption

by June 13, 2016

Technology evolves quickly, and it changes our way of life faster than appreciated. Hence, it is of value to us to study comprehensive materials by large organizations which surveyed the changing landscape. Citibank had recently released a worldwide study on ‘Digital Disruption’ in March 2016.

We had released a previous version which covered five areas of FinTech investment, the tipping point of Europe and US banking, Chinese payment system, mobile payment for the underbanked and the increasing acceptance of mobile payment in India. In this article, we will provide a different perspective of this vast study which spanned 112 pages.

The first article looks at this vast report in broad strokes, but this article gives more depth and understanding to our digitally disrupted world.


Futuristic Chinese Third Party Payment System

Chinese consumers are the leading adopters of e-commerce where they purchased 40% of the $1.7 trillion of online merchandise globally in 2015. This has driven them to embrace digital payment methods such as Alipay and Tenpay.

Alipay performed $931 billion of payment last year with the backing of the e-commerce ecosystem of Alibaba. The entire Alibaba ecosystem is significant which included Taobao, Tmall and Alibaba for customer to customer (C2C), business to customer (B2C) and business to business (B2B) online transaction. All three are dominant in their niche segments, and Alipay provides the best user experience for online payment.

DIGITAL DISRUPTION | Alibaba group e-commerce ecosystem

Besides the direct buyers and sellers in the Alibaba marketplace, there is a whole team of logistics partners, online marketers and other players who have to use Alipay. This widespread acceptance allowed Alipay to jump out of online transaction to the physical transaction payments with mobile phones. China is ahead of the game, and we might be heading in that direction soon.


Human Touch & Digitalization of Banking

The survey found that banking customers are increasing deserting physical branches for manual transactions. On average, customers use online venues to do their banking 15 out of 17 times.

DIGITAL DISRUPTION | Commercial Bank branches

The US and European banks are responding by cutting down on their branches and associated staff at the rate of 2-3% per year. These made up 65% of cost and banks are expected to cut $175 billion of cost this year and add 39% of profit.

While customers are avoiding banks for transactions, they are going to banks for the human touch for complicated issues or life changing events. Future bank branches are going to be about connectivity, advisory, and consultation. Citibank advised banks to resize, reposition and re-energize themselves to meet changing customer needs.


Future of Banking Digital Disruption

Banks are now facing increasing threats from fintech trying to take over segments of their business. Citibank had concluded that capital light and different methods of working attracted the most fintech in areas of payments, marketplace lending, and credit scoring.

We might be the last generation using credit cards and in the future, there might be products like credit access loaded onto phones created by banks. This might be the bank’s answer to Apple Pay and Alipay.

DIGITAL DISRUPTION | impact of digital disruption by business line

Citibank concluded that several factors influencing the actual disruption of existing FinTech solutions in the near future. Based on their study, they foresee certain products with higher disruptive power than others and they chart it down according to the time frame they think will happen.

For instance, Citibank thinks that fintechs are unlikely to disrupt mortgages soon, but deposits are already starting to be disrupted by banks who partner with fintech to create digital-only banks.



Digital disruption is an ongoing phenomenon that changes the way we work and live. In China, the masses voted on their feet for third-party payment system over traditional banking system as it allowed for faster, cheaper and more secure of online payment. The online influence of e-commerce had changed the fabric of Chinese society to their daily living patterns offline.

Banks are changing the way that they operate and they expect their products to be disrupted digitally. For some banks, instead of waiting for others to disrupt them, they are disrupting their method of operations. Digital is the future which we should embrace but we shouldn’t neglect the human touch.