How to survive in the UK financial services industry

John Berry, Efma’s new regional manager for the UK, outlines the current issues facing retail banks operating in Britain and explains what needs to be done to ensure success in the years to come.

How to survive in the UK financial services industry

What are the key trends in UK financial services at the moment?

There’s an awful lot going on in the industry at present. First, there is a clear need for the customer experience to improve since this is the key differentiator for banks. It needs to start with far better on-boarding experiences, rather than today’s generally slow and unfriendly processes. Fintechs are already leading in this regard, which means the pressure is on in for traditional banks to compete.

Challenges in distribution balance are also rife. Mobile? Branches? Third parties? Online? What will make a customer more likely to stay with a bank and, most importantly, buy more of their products? Many ideas are being tried and tested, but getting the balance right between cost and revenue is the challenge.

Security is also front of mind for UK banks today. It’s major issue for customers who see many examples data breaches in the headlines. I believe that this issue is likely to grow in importance in the coming year.
Another trend is regarding the way in which products are positioned. Banks are slowly moving from selling products to selling experiences. This requires both a different approach and a different skill set

Technology is another area of focus. The rise of chatbots introduced by the new players, for example, is highlighting the new role of AI which has huge potential in terms of wealth management, compliance and advice.

Leadership and people skills are also evolving. Do boards have the right skill set for today’s digitally driven world? Is the bank structured appropriately for today, let alone the future?

Finally, the PSD2 regulations are having a remarkable impact in the UK. This will increase competition in an already competitive payments industry and bring into scope new types of payment services and enhance customer protection and security.

How has Brexit impacted the UK banking sector?

There has been no perceived impact on retail banking as yet. Santander, for example, has clearly stated that it will be staying put with no change. I expect there will be more clarity over the impact of Brexit in the next two years or so.

How can UK banks better meet the challenges they’re facing at the moment?

There are five areas in which banks need to focus their efforts:
- Focus more on the customer experience and overall customer journey
- Learn from other sectors such as retail, telecoms and hospitality
- Remove barriers – change from a sales culture to a buying culture
- Introduce new methods of tackling projects swiftly (like ING/BBVA)
- Review the current siloed structures

What do you believe the typical UK bank will look like in 2030?

If only I had a crystal ball! The demise of branches has been predicted for years, however, while there may be less, they will still have a role to play, even if it’s quite different from what it is now.

Mobiles have transformed people’s lives, but the iPhone is only 10 years old. With the pace of change, what will be the iPhone of the future? How will different generations adapt – especially with ageing populations with wildly different needs? Will you bank with a bank at all? Maybe it will be a retailer or mobile phone company.

What’s clear to me is that customers will bank with someone they trust. Cards will probably be replaced by numerous other means of payment be it by phone, keyring or bracelet etc. Banking will be less about where you go and more about what you do. It will be less boring and more about helping your dreams come true.

What can Efma bring to UK financial players?

A key benefit offered through Efma is the sharing of ideas, innovations, project successes and failures between members. Efma has over 2000 project details that members can access, either directly or through a planned meeting with one of the Efma team. In a world where change is so rapid, having access to such data is like gold-dust.

In addition, Efma works together with global consultancies to share insightful reports and thought leaders’ views. I have been involved with Efma for over 25 years and, throughout that period, I have found the organisation to be extremely informative and a valuable source of data. Indeed, my introduction of the Costa Coffee & Banking innovation, which received global recognition, was as a direct result of attending one of Efma’s international learning tours. Considering the value that can be extracted by members, the annual cost is little more than one full time employee.


Bank Products & Services Fintech Digital/Mobile channels


United Kingdom