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02 May '15 | Debjyoti Paul

German Shoppers: Meet Them in the Fast Lane to Phy-gital

15 January '15 | Ralf Reich

Shoppers Will Share Personal Information (But They Don’t Want to be “Friends”)

15 January '15 | Anil Venkat

Modernize or Perish: Property and Casualty Insurers and IT Solutions

14 January '15 | Manesh Rajendran

Benelux Reaches the Phy-gital Tipping Point: Omnichannel Readiness is Crucial

13 January '15 | Anil Gandharve

The New Omnichannel Dynamic: Finding Core Principles Across Industries

13 January '15 | Debjyoti Paul

Technology does not disrupt business – CIO day 2014 Roundup

02 December '14 | Anshuman Singh

Apple Pay – The Best Is Yet To Come

02 December '14 | Indy Sawhney

Digital transformation is a business transformation enabled by technology

01 December '14 | Amit Varma

3 Stages of FATCA Testing and Quality Assurance

06 October '14 | Raman Suprajarama

3 Reasons why Apple Pay could dominate the payments space

18 September '14 | Gaurav Johri

Beacon of Hope: Serving Growth and Customer Satisfaction

05 August '14 | Debjyoti Paul

The Dos and Don’ts of Emerging Technologies Like iBeacon

30 July '14 | Debjyoti Paul

What You Sold Us On – eCommerce Award Finalist Selections

17 July '14 | Anshuman Singh

3 Steps to Getting Started with Microsoft Azure Cloud Services

04 June '14 | Koushik Ramani

8 Steps to Building a Successful Self Service Portal

03 June '14 | Giridhar LV

Innovation outsourced – a myth or a mirage or a truth staring at us?

13 January '14 | Ramesh Hosahalli

What does a mobile user want?

03 January '14 | Gopikrishna Aravindan

Key Industry Drivers for Banking in 2016-17

Posted on: 23 February '16

The evolution in customer behavior, rapid innovation in digital technology, burgeoning regulatory requirements, and the macroeconomic environment are seemingly the four key drivers shaping the future of banking.

 
Customer Behavior

1. Customer Behavior

The new ways consumers get information and go about their lives is profoundly different from the customer behavior norms of yore. Increasingly, customers are looking for digital interactions that are simple yet aesthetically appealing, highly personalized and context aware so that the need of the moment is served quickly without cumbersome intervention from the service provider. Customer Experience (CX) is now the decisive competitive differentiator between banks, more so than just the breadth and depth of their products and services portfolio.

Digital Innovation

2. Digital Innovation

Advances in digital technology are offering a myriad of channels for customer interaction. Channels like online and mobile banking have already changed how customers engage with the bank. Customer interaction through digital channels is also generating valuable behavioral and transactional data. Analytics on this newly available data enables even more meaningful ways to engage customers.

Ever since the transaction mix started favoring digital channels, most industry analysts and technology service providers have been calling out the underlying technology imperative. However, what is often overlooked is the operational transformation and process optimization required to profitably support the morphing operating model. Furthermore, as the operating model transitions to support this bias towards digital interactions, back office systems such as Core Banking and CRM will also need to be modernized to provide requisite functional capabilities.

Regulatory Compliance

3. Regulatory Compliance

Increasing regulatory pressure is one of the legacies of the recent financial crisis. The cost of compliance as well as non-compliance continues to be on the rise. In many scenarios, streamlined customer interaction and low-touch transaction processing made possible by the ubiquity of digital channels will help mitigate various risks associated with regulatory compliance. Moreover, a number of compliance initiatives can generate information and context that can be channeled towards revenue creation.

Macroeconomic Environment

4. Macroeconomic Environment

The interest rate trends and after-effects of the financial crisis have created a tough operating environment for banks. At the time of this writing, the return on equity and return on assets for banks in the US is close to the lowest it has been over the past 12 quarters. Return on equity remains below the cost of equity. Now, more than ever, banks are looking to eke out incremental profitability from product and service innovation deployed via digital channels. However, such profitability can only be achieved via efficiencies derived from requisite operational changes and process optimization.

The confluence of the four drivers above continues to accelerate the convergence of banks and their customers towards the uptake of Digital Banking. Given this climate, it is imminent that future strategy and technology roadmaps will focus on most, if not all, of the following:

  • A digital Customer Experience (CX) focused on customer delight
  • Data Management and Analytics for personalized & context-sensitive customer interaction
  • Operational Transformation & Process Optimization to support morphing operating models
  • Enhancement of Core Banking, CRM, and other key systems for requisite business capabilities
  • Digital Marketing platforms to effectively harvest in-the-moment business opportunities