The future of banking – think palm of your hand rather than the cash dispenser

Retail Financial Services

James Goad

Artificial IntelligenceBack OfficeBank and Brand Distribution of Retail Financial ServicesBehavioursBig DataBrandCloudCultureCyberData ScienceDigitalEngagementExperienceFintechFront OfficeJourneyManagement InformationMobileOnboardingRecruitmentRetail Financial ServicesSecuritySocial MediaTrends

As regulatory changes, shifting demographics and advancing technologies transform the face of banking, the industry must evolve. In order to succeed in this brave new world financial institutions must embrace technology, review partnership models and enhance customer experiences.



  • How to maintain and build big distribution?
  • Understanding the voice of the customer: how can FIs keep up with the pace of customer expectations of clarity and immediacy i.e. the culture of, “just make it work”?
  • How can the trend of partnerships with technology and fintech support the outsourcing of infrastructure to enable change in operational models?
  • How can technology and open banking best be leveraged to improve the use of customer data to build experiences that delight?
  • Legacy systems and infrastructure: FIs are challenged by the level of investment required financially and operationally to achieve rapid evolution in the face of competition from outside the industry. How can they counter this most effectively?
  • Competition: rise of digital players, international payments market and connected living e.g. Google home will see market change. But how will the FIs use these trends to their advantage and embrace the future market place models?

Key issues and challenges

  • Over 50% of the world are expected to be online in 5-10 years time. With 5bn online vs today’s 3bn what will this mean for the future of FIs?
  • How can Research and Development be used to embrace new trends? FinTechs spend on average 10% revenue on R&D vs FIs at 1-2%. What is the cause? Is it low average ROI’s? (FI’s approx. 5%), or organisational commitment? 
  • We see the need for flexible operating models i.e. change in the value chain. However, it is not easy to achieve as FIs grapple with changing customer demand to create new, flexible scale-up models that move away from traditional product siloes. 
  • The rise of Alipay/WE Chat models with vast consumer databases (c.600+ million users) and the majority of consumers now adding payment details to allow transfers is a significant shift in the industry. Will partnering with consumer brands e.g. Amazon to build the invisible banking world be the emerging trend?
  • Switching remains a discussion point, particularly on how to enable clear comparison of complex products. What will finally convince/encourage consumers to switch?
  • If this challenge is answered – who will be the winners? Traditional vs GAFA vs challenger vs the new market place enablers?
  • Understanding consumers and their needs remains key. Complex product information online is poor and consumers need to be reassured they are being listened to and having their needs met.
  • Financial education is needed to support generational gaps financial well being.
  • Whilst Branch networks reduce in size driven by the need for cost savings and efficiencies there is growing demand for human interaction and foot fall to branches.
  • However, in-branch customers are restricted to the products available and need to be informed about other options making hybrid models fundamental to success.
  • The effective use of data and segmentation will define future winners and losers. We are likely to see an increase in nudge marketing via personalised journeys.
  • Service and experience will underpin the transformation of customer experience.
  • Partnerships were widely considered to be the best way to achieve this in the light of legacy systems and operational models.
  • Some of the big FIs beginning to steal the march in building emotional connections with their customers. 
  • Artificial Intelligence (AI): voice and assisted technology are growing as a way to help consumers and are considered hugely exciting in driving the future of our retail banking world.
  • Brand trust will grow in importance as consumers navigate a confusing market place.
  • All present agreed that the FI’s wont be able to implement all this change alone and  collaboration is key.  What this will look like is open to debate particularly with open banking and the rise of the “market place models” e.g. Bud. However, attention is being kept on mobile banking trends and emerging models e.g. the Nordics.
  • Regulation and ring fencing continue to be front of mind but there is confidence that regulatory change is driving better, plain speaking experiences that help customers.

Conclusions and solutions

  • There was a bullish feeling in the room with the collective response seeing Open Banking as positive with the chance to be revolutionary.
  • The future will see more funding going into R&D, increasing collaboration on products and intelligence between FinTechs and FIs.
  • Progress will be made in the use of data to segment to build frictionless, personalised customer journeys that will keep up with consumer demands and make it easier for them to interact. Partner collaboration via innovative tech solutions will be needed to achieve this.
  • Data use will evolve and we are likely to see FIs increasingly looking at families as well as individuals as key to break down product siloes.
  • AI will continue to rise as research into experience, interaction, integration, customer choice and science evolve.
  • However, the importance of human interaction must not be forgotten.
  • The ongoing conundrum of how the combination of human and digital will manifest itself is one that has no clear answer and no clear winner. It will be a combination of the human and digital interface, but the recipe as yet remains unknown.
  • There will be a flight back to trust and big brands are likely to be the winners although we are likely to see increased interaction with financial products via consumer brands.
  • A question was raised that market may shift into big fintechs and big FIs and will this really disrupt? Also, that we may also see consolidation in the light of Brexit.
  • In the future, pockets of brilliance are likely to emerge to shape the industry but changes will be slower than we hope. However, there is hope and confidence from all participants that the future will see consumers being more delighted by FI brands.

Moderator: Sarah Collinson, Owen James Group

Expert: Kevin Mountford, Raisin UK