The status quo in retail banking is tottering. This has forced banks and credit unions to modify their business models, re-prioritize investments, change products and services offered and ramp up innovation efforts. There has also been a rethinking of distribution options, with digital channels significantly increasing in importance. These shifts are reflected in the sixth iteration of a study of the future of retail banking conducted by The Economist Intelligence Unit, on behalf of Temenos. Until recently, the changes in consumer behavior were believed to be the primary impetus for changes in retail banking strategies.
According to the 2018 Global Retail Banking Report from The Economist Intelligence Unit and Temenos, global banking organizations are focusing on advanced technologies, customer experience and security of data in their efforts to keep pace with consumer expectations. At the same time, many have conceded the battle for payments to fintech and big tech organizations. Subscribe to The Financial Brand via email for FREE!As the banking industry continues to move more transactions to digital channels and adjusts the technology used in back-office operations, costs are being reduced, productivity is increasing and response to risk and compliance needs are improving. As a result, and for the first time in its five-year history, the annual Economist Intelligence Unit survey on the future of retail banking, conducted for Temenos, shows that global bank executives are now more concerned with technology-driven trends than they are by regulation. About 58% of respondents in the survey said "changing customer behavior and demands" will have the biggest impact on retail banks in the years till 2020, citing a survey of 400 senior banking executives across the globe.
The banking industry is trying to respond to an increasingly turbulent business environment, where legacy leadership and existing cultures are being challenged. In many instances, the legacy culture becomes a barrier to required change needed to become digital banking organizations. Not only do leaders need to articulate a vision for a future of increasing customer expectations, greater competition, new delivery channels and advancing technology, but also provide the resources to become digital financial technology organizations. Never has there been a greater need for transformational change as opposed to incremental adjustments to "business as usual." As part of the research for the 2020 Retail Banking Trends and Priorities report, we looked at the anticipated retail banking trends for 2020, and the underlying priorities articulated by financial institutions globally.