For the last seven years, Infosys Finacle has conducted a comprehensive financial services survey with the Efma association, to understand the changes taking place in the banking industry.
The survey covers areas such as banks’ corporate and IT priorities, their challenges and their view of the competitive environment. This year, the report focused on disruption and how banks can effectively work with start-ups to boost their innovation performance.
The 2015 survey continued to show an industry that is facing up to massive structural change. Even more so than in 2014, bankers are concerned about the triumvirate of new competition, product innovation investments to prioritise and changing customer behaviour.
>See also: Re-imaginging the bank: why financial services need digital transformation
In common with the 2014 survey, countering competitive threat was once again considered to be industry’s biggest challenge, cited by 72% of respondents, with bankers concerned that more empowered and better-informed customers may begin to switch providers.
In terms of where bankers perceive the growing competitive threat to be coming from, the findings are very interesting and represent an area where opinion is changing fast.
As highlighted in last year’s survey, bankers consider the threat from outside the industry (new banks or non-banks) to be at least as great as the threat from incumbent providers.
In 2015 sentiment has changed. Bankers are now clearly more concerned with the threat from outside than inside the industry (72% in 2015 vs. 45% in 2014), for example from start-ups banks.
Two of the most omnipresent trends are the heightened use of customer insight for the delivery of products and services and an enhanced customer experience, and the continued development of digital channels and associated digital services.
The changes in the financial services industry will be driven by increasing and evolving consumer demands combined with continued competition from outside the industry and start-up organisations.
Changing interactions
With upcoming generations of consumers fully embedded in mobile, digital and social media as a way of life, interaction expectations are changing.
By leveraging richer analytics-driven insights, banks will be enabled to provide a more personalised approach to targeting and engaging with consumers.
From location-based offers to improved service delivery, organisations will use spending patterns, product use and channel interactions to enable improved experience-driven banking.
The acceptance of mobile banking has grown more quickly than most financial institutions could have imagined. The impact of channel migration is changing the foundation of banking as we know it, with banks now being carried in customer’s pockets and handbags wherever they go.
This seismic shift in consumer behaviour is prompting banks around the world to innovate their mobile offerings. Exciting innovations are occurring at every mobile banking customer touch-point at banks across the world.
From initial registration and transacting to channel integration and social media engagement, banks are leaping forward with new ideas that will simplify mobile banking while providing additional functionality.
>See also: The rise of digital challenger banks – are they just for millennial ‘mobivores’?
The desire for an improved customer experience will bring retail technology to bank branches and will allow branch personnel to quickly recognise the customer, predict the reason for the visit and perform outstanding customer service.
In addition, in the rush to self-service and digital delivery, it is important to digitise the employee, and not just the branch.
The greatest competitive advantage that established firms have is to use digital touchpoints to enhance interactions between customers and employees. That said, there is still some way to go.
