Although many have predicted the doom of traditional retail banking with the rise of new entrants especially in fintech that focuses on superior customer experience, we believe that traditional banking companies still have a bright future. The emerging trends in retail banking such as AI and RPA are aimed at enhancing customer experience and matching performance with that of innovators in the banking industry. Apart from these, we can also expect several transformations in the approach and operations of banking companies. Infiniti Research has worked with dozens of banking companies across the globe and played a pivotal role in helping them to adopt agile business strategies to survive the dynamic market conditions. Based on our observations and expertise, here are some of the emerging retail banking trends that players need to be prepared for in 2020.
Emerging trends in retail banking 2020
Reorganizing around customers rather than products or channels
In 2020, an interesting emerging trend in retail banking that we can expect to see is that banks will gradually move their focus away from products and services and begin organizing themselves around creating exceptional customer experiences. They will aim to develop the ability to view customers as a single unit by recognizing their uniqueness and tailoring offerings to suit their needs rather than being ‘pushy’ to buy banking products or avail different services.
The growth of social media
Social media is not just one of the emerging trends in retail banking, but it has become widely popular across industries. In 2020 and beyond, retail banking companies will embrace social media platforms as a primary source to connect, engage, inform, and understand their customers. It is also expected to become an important platform where customers research banking products/ services and make a purchase decision. Mastering social media capabilities will be a core competency for retail banking companies to cope with the emerging trends in retail banking.
Cybersecurity in building customer trust
Security of transactions is one of the most crucial factors that banking customers consider while choosing their banking partner. To avoid cybersecurity glitches that have occurred in the past, we can expect to see several top banking companies investing heavily into preventing cyber-attacks. This year onwards, you can expect to see leading banks develop cyber-security strategies that are aligned with their business objectives, risk-management protocols, and regulatory requirements. Since several retail banking companies lack the ability to tackle this issue, they might partner with third-parties to provide cyber-security assistance.
Two factor authorization to become common in transaction authorization
Although biometrics is believed to be unique, it can often be replicated and can result in fraud. As a result, two factor authentications will soon become mandatory and one of the most notable emerging trends in retail banking industry. This means though retail banks will allow fingerprint or voice recognition in transaction authorization, it will remain tied to a replaceable physical device such as a smartphone.