The Future of Retail Banking 2016
Banks are under intense pressure. They face a perfect storm of low interest rates and investment yields, new regulatory requirements and now the uncertainty of Brexit at the very same time that customers are notably becoming restless. Competition is intensifying as challenger banks and FinTech start-ups threaten traditional value chains, while technology is developing at a dizzying rate, with game-changers such as blockchain and artificial intelligence threatening even to overhaul the industry as we know it. Increasingly sophisticated fraud and cybercrime is also on the rise.
Yet with these pressures come unprecedented opportunities. The move to open banking could accelerate innovation, whilst new technologies offer ways to deepen customer engagement and create new revenue streams. FinTech is as much of an opportunity as it is a threat, and collaboration between banks and FinTechs could enable the creation of innovative and personalised products and services that truly impress customers. Artificial intelligence, in particular, is bringing the potential to power business improvements across the bank, from lending decisions to customer experience, and also to drive out fraudsters. Blockchain, meanwhile, could cut operational costs, enabling incumbents to compete with low cost start-ups.
One thing is clear: there is a short timeframe of three to five years within which new technology, changing customer behaviour and fierce competition can be expected to hit the mainstream and change banking operations forever.
Our survey takes the pulse of the industry at this most interesting of times, a crossroads on the journey to the digital future. The decisions made now, on investment priorities, collaboration and innovation in the face of uncertainty and regulatory upheaval, could well determine whether banks look back at this moment as the start of a new dawn – or the beginning of the end.To download please sign in.