Innovation in retail banking report 2020
Efma and Infosys Finacle are proud to present the 12th annual ‘Innovation in Retail Banking’ report, authored by Jim Marous, Owner/CEO of the Digital Banking Report. This report highlights the top digital trends in the industry that are transforming the way banks operate and how they are innovating to engage with customers.
As in years past, this year’s edition clearly shows the emphasis on digital transformations. 75% of respondents listed digital banking transformation as a top three focus area. While banks had been making efforts to become truly digital enterprises entering 2020, the pandemic-induced dis- ruption to business and society this year has only further stressed the importance of digital agenda, for employees and customers alike.
These digital transformations are being made with one primary goal in mind: improving customer experience and engagement. 87% of respondents said customer engagement was at the core of their transformation plans, followed closely by improving use of data, AI, and analytics. Banks have unprecedented amounts of data available to them. Now, it is a question of how they put it to use in delivering elevated customer experiences.
Customers are using and experiencing their banks in increasingly digital ways, meaning banks have to evolve their delivery to keep pace with digital lifestyles. Respondents believe that a lot of innovation will take place in product delivery and channels in the coming years. Further develop- ment of omnichannel delivery is done with a view to maintaining or becoming a universal player that has a digital relationship with all customer segments, according to 60% of respondents.
A majority of respondents said it is highly likely that innovation in the banking industry will be led by non-traditional players, notably leading consumer technology companies such as Google and Apple or digital commerce giants like Amazon and Alibaba. Those companies, along with fintechs, have crowded into the financial services space with impressive new offerings, with data, digital, and simplicity at their core.
The pressure from external tech giants and upstart fintechs means financial institutions have little time to waste. Competition for people’s wallets and attention is fierce. Banks must adapt and pro- vide the suite of services that younger, more tech-savvy consumers have come to expect. But using data to create exciting and intuitive ways to bank digitally can’t be done by simply bolting digital tools on to outdated business models. The study underscores the importance of reimagining the organization culture and business model in today’s environment as opposed to merely using digital tools and technologies to support digital innovation.
We hope that readers of this report will find the insight from all banks and credit unions that par- ticipated both informative and inspiring as they accelerate their digital transformation journeys and adapt to our new reality.