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Banking M&A + M&A Strategies

Is M&A the Best Way Forward in the Recovering Banking Sector? Thought Leaders Discuss

Until 2018, the impact of the financial crisis of 2007-08 was visible in the US banking sector. Banking mergers and acquisitions had become limited, and the sector struggled to grow. However, in 2018 banking M&A witnessed recovery and prepared for substantial growth over the following years. In early 2020, this growth was suddenly interrupted by the advent of the COVID-19 pandemic.

As industries across the world attempt to recover from the aftermath of the COVID-19 pandemic, experts forecast growth for the recovering banking sectors across the world as well. Banking M&A has recently become crucial due to the increasing need for investment in technology and digital capabilities, and the various regulatory changes. Prior to the pandemic, consolidation had recovered to levels that were last seen before the financial crisis.

After the initial staggering impact of the pandemic, all industries have started preparing for recovery and are attempting to adapt to the new normal of the post-COVID era. Similarly, banks are on the path to recovery, and M&A is one of the most effective and crucial ways to recover successfully. Banking M&A is a challenging process and requires appropriate planning and unparalleled M&A strategies.

In this article, Infiniti Research experts discuss the impact of the COVID-19 pandemic on banking M&A. Additionally, as banks return to banking M&A with renewed motivation, it is important to be aware of the potential challenges, and the ideal way to approach this process and the difficulties encompassed. Therefore, this article details the significant upcoming challenges and the role of appropriate M&A strategies, as highlighted and discussed by Infiniti’s M&A support experts.

Attempting to recover from the aftermath of the COVID-19 pandemic through banking M&A? To learn how Infiniti’s M&A strategies can help you assess, identify, evaluate, and choose the ideal consolidations, request a FREE proposal.

Impact of COVID-19 on Banking M&A

With the rising number of cases in the United States and declining GDPs worldwide, all industries suffered substantial losses. Similarly, banking M&A saw a rapid decline in valuations and total shareholder returns. Additionally, boards and CXOs have shifted their focus to maintaining business continuity and stabilization of current businesses.

Further, the uncertainty of capital flexibility and losses, and the duration of the economic pressure has made M&A unappealing to buyers. In the instance of major distress due to factors such as capital pressure or material risk of failure, struggling organizations may need to sell. Apart from extreme measures, however, selling is not the ideal option in a struggling economy.

However, as banking M&A increases,  several trends are expected to surface. For instance, the rising need for fintech and digital capabilities, accompanied by the potential lack of funding for new fintech firms with limited market experience, may promote consolidation between traditional financial institutions and fintech firms. Additionally, the sudden upsurge in demand for digital platforms in every industry due to the pandemic will promote the need for banks and fintech companies to consolidate.

As these and other market trends begin to influence the recovering market, banking M&A is expected to recover within 2020 marginally. However, the COVID-19 pandemic will have a lasting impact on the foreseeable future of the banking sector.

Speak to our experts to know more about the impact of COVID-19 on your industry, the ideal path to recovery, and adapting to the new normal.

What companies need to prepare for during Banking M&A

As the banking sector starts on the path to recovery, the banking M&A process is set to face various challenges and opportunities. Although there will be a steady increase, the industry is expected to take a substantial amount of time before it has made a complete recovery. After a sudden impact like that of the COVID-19 pandemic, banks and fintech firms should be prepared for various factors in banking M&A to ensure successful transactions and avoid further losses.

Banking M&A + M&A Strategies

Therefore, Infiniti’s M&A strategy experts identified the following four crucial factors for banking M&A participants to prepare for:

Staying Ahead of Regulations

Changing political, social, and economic environments have previously posed substantial challenges for the financial and banking sectors. As 2020 proceeds, the political and economic scenario of the US continues to be precarious, and that directly impacts the regulatory environment of all industries. In the case of the banking sector, particularly, potential political regime changes can easily alter the future of all industry players and M&A transactions.

When strategizing for M&A transactions, participants need to prepare for possible regulatory changes and the impact of a new political regime on the economic environment. Additionally, choosing a partner that will be beneficial and supportive through changing factors is highly crucial and contributes significantly to a successful M&A. Therefore, key players have recently shifted their focus to acquiring professional assistance in developing M&A strategies. This helps ensure effective and successful strategizing and implementation of consolidations.

Accepting the New

The need for technological and digital capabilities has increased substantially over the last decade. Industries and consumers have become increasingly dependent on technology to carry out all major commercial transactions and activities. This has created the need for traditional financial institutions to consider and execute consolidations with financial-technology (fintech) firms. With increasing M&A transactions between traditional banks and fintech firms, the banking sector is headed on a path to digitization. However, although it is widely accepted that it is time for banks to shift from their legacy systems to modern fintech is necessary for survival and proliferation, many institutions struggle to make the change.

As the term legacy suggests, these systems are highly dated and a core part of the traditional banking systems and brand identities. However, they no longer fulfill the requirements of the modern consumer. Therefore, traditional financial institutions must prepare to consolidate with their agile fintech competitors and accept the new wave of technology. Adapting is crucial to survival, and changing to modern, adaptable, and consumer-centric systems is one of the essential changes for the banking sector.

Understanding Cultural Integration

During integrating, two independent organizations, boards, and CXOs often fail to account for the impact on their employees. This has led to a high failure rate in banking M&A in the best. Therefore, as companies work towards new M&A transactions, it is crucial to account for employee sentiment towards the consolidation process and ensure clear communication with all company employees. The right M&A strategy helps banks clearly communicate with and adequately train their employees for the new changes in the organization.

It is also important to ensure that employees on both sides of the deal agree with new policies regarding compensations, benefits, and organizational culture. Ensuring appropriate cultural integration can make or break an M&A. Proper cultural integration helps increase employee satisfaction and promotes efficiency and productivity. In some cases, organizations create an integration management office, with an integration CEO that helps manage every segment of the integration process, ensuring appropriate cultural and employee integration.

A Slow Path to Recovery

Although banking M&A is expected to recover through the remainder of the year, this process will be long-drawn and limited for a certain period. Currently, the scale is critical, and many struggling financial institutions and fintech firms will require M&A transactions to survive through the pandemic.

However, the economic impact of the pandemic has sent tremors through various segments of the banking and financial services sector, leading to an increased focus on short-term business continuity and reduced attention towards major investments such as M&A transactions. Therefore, companies must prepare for a slow and steady recovery and the possibility of limited options and partnerships. The right M&A strategies can help banks and fintech firms identify and execute the ideal M&A transactions even in a slow market.

Request more information and learn how Infiniti’s M&A strategies can transform the challenging banking M&A process into an attainable target for your organization.

How the Right M&A Strategies Can Help in Banking M&A

As financial institutions enter this phase of recovery, and banking M&A makes a long-awaited return, M&A strategies can be the major difference between successful and unprosperous consolidations. Infiniti’s experts help financial institutions overcome the challenges of banking M&A while maintaining business continuity and enabling a successful merger.

Three ways in which Infiniti’s M&A support and M&A strategies can help financial institutions in these challenging times are as follows:

  1. Organizations can create systematic and programmatic approaches to the process and enable the continuous development of potential M&A candidates.
  2. Boards, investors, and CXOs are offered data-driven insights and advice through the M&A process, with unparalleled guidance and research support.
  3. Financial institutions can assess all potential opportunities, identify the ideal partnerships for their organization, and make well-informed decisions about their future.

Recovering from the COVID-19 pandemic is expected to be a long-drawn and challenging process for all industries. However, with the right assistance and guidance from Infiniti’s M&A support experts, financial institutions can develop and execute successful M&A strategies that will boost the recovery process of their organization and the financial services industry.

ATM managed services

ATM Managed Services Provider Identifies New Technologies to Enhance User Experience and Adapt to the ‘New Normal in Banking’ |Infiniti’s Market Intelligence Success Story

Engagement summary

Digital transformations in the ATM (Automated Teller Machine) managed services is a highly challenging milestone. However, it is paramount to embrace advanced digital technologies in ATMs to enhance user experience, increase usage, and ultimately survive amid cut-throat market competition. To analyze the market and adapt to such changing trends, a prominent player in the ATM managed services sector approached Infiniti to leverage its expertise in custom market intelligence. They primarily wanted to understand the key technological developments in the ATM managed services market across different regions, gauge customer expectations, and analyze how their key competitors are responding to the dynamic customer demands. Additionally, our industry experts were tasked with helping the client understand and strategize for the impact of COVID-19 on the use of ATMs and banking as a whole. The engagement was carried out in three phases over 12 weeks and resulted in the successful redesigning of the client’s existing operations to align with customer expectations, ultimately giving them a competitive advantage in the market.

Client profile

 The client is a multinational financial and retail technology company based in the EMEA region. The company specializes in the sale, manufacture, installation, and service of self-service transaction systems, POS terminals, and physical security products for global markets.

ATM Managed Services Market: Business Challenges Faced by The Client

Technological advancements are enabling ATMs to transform from being a mere cash dispensing machine to a highly personalized and improved communication channel between banks and customers. Financial institutions can gain big from these channel transformations as deploying more integrated, and value-added services can reinforce operational efficiencies and improve customer loyalty. But in most cases, adapting to digital transformations is easier said than done.

The client faced challenges in staying updated with the latest trends in the ATM managed services market and incorporating them into its business. However, additional investments into technology meant added costs on the financial institutions and for the maintenance of ATMs. This was especially a challenge for their business in the APAC region with several regional competitors in the market offering services at low profit margins. As such, the client wanted to identify cost-effective technology trends in the market that they can capitalize on. They also aimed to deliver greater value propositions through enhanced customer experience and reduced ATM fraud.

Another key challenge faced by the client was the increasing competition from digital payment channels. Notably, easy access to the internet, increased smartphone use, and the introduction of multiple e-wallets coupled with supportive government initiatives around digitalization and the COVID-19 crisis have compelled users to adopt digital payment channels to carry out transactions. This increasing adoption of digital payment channels was reducing the usage of cash which in turn affected the usage of ATMs and ultimately ATM managed services.

Infiniti’s Approach

The engagement took the course of a sequential approach that involves three key phases:

Infiniti’s custom market intelligence experts addressed the client key concerns through a thorough analysis of market factors and trends that had a direct impact on the client’s business, enabling the client to understand the gaps to be covered. A market segmentation study was undertaken for a region-wise study of the ATM managed services market. Through this, the client was provided with critical insights on the most attractive markets with lucrative opportunities to capitalize on within each of these markets. Experts at Infiniti proposed North America and APAC as the ideal markets for the client to expand their investments.  China, India, Japan, and South Korea were identified as the key markets to focus on in the APAC region.

An in-depth competitor analysis also highlighted key competitors of the client in each of these markets, product offerings to cater to changing customer demands, their key strategies and competitor best practices for customer journey deployment, and managed services offered by top market players. The client leveraged these insights for a SWOT analysis of each of their key competitors to gauge how their offerings compared to that of key market players.

The client also leveraged Infiniti’s market trend analysis to gauge the most feasible technological innovations on which they can invest and create a competitive advantage in the market.   

Key recommendations

Through the engagement, some of the key recommendations given by our industry experts to the ATM managed services client include:

  • Focusing on service offering and investments in the US, Canada, and APAC will help the ATM services provider increase share in the market
  • Key services that are currently highly in-demand in the market include ATM network monitoring, virus and malware protection, encryption services, anti-skimming solutions, and compliance. The client must expand their capabilities in these services to gain a competitive advantage in the market.
  • The client can reduce operational and maintenance cost by offering new and innovative services such as cash recycling, OTP-based cash withdrawal, and loan payments through teller machines.

For more detailed industry expert recommendations, request a FREE proposal

Business Impact for the ATM Managed Services Provider

The custom market intelligence helped the client identify critical gaps in their service offerings in contrast with the key market competitors. Other business outcomes obtained by the client include:

  • Reduced operational costs by 20% by adopting innovative and cost-effective services as recommended by our industry experts.
  • Invested into new and lucrative markets based on region-wise strategic recommendations to gain a competitive edge obtained through the engagement
  • Recorded 2X increase in ATM usage and increased customer engagement by incorporating additional value-added services that are convenient and support superior cybersecurity measures.

For more insights into the ATM managed services market, get in touch with an industry expert

US banking industry

Leading a US Banking Industry Client through the Coronavirus Pandemic with Custom Market Intelligence Solution

As the governments around the world attempt to defend against COVID-19, companies in the US banking industry are experiencing an unprecedented period of growth and prosperity. Small and medium-sized consumer banks are most at risk owing to the disruption caused by the COVID-19 pandemic. Also, social distancing has changed the way people interact with physical space and has subsequently created an unprecedented crisis for the US banking industry. The longer the crisis exists, the more likely we are to see transformative and lasting changes in the US banking industry. As such, its’s high time for banking companies to take actions to respond to the coronavirus pandemic and prepare for the post-COVID-19 environment.

This case study provides detailed insights into how our custom market intelligence solutions helped a US-based banking company to respond to the threat of COVID-19, centralize cash management, implement a flexible operating model, and serve customers in challenging times.

Our market intelligence experts can help you to develop a customer-central multichannel operational model to keep pace with the changing financial needs of customers amidst the COVID-19 crisis. RFP here.

Business Challenge

The client is a banking company based out of North America. 

Since the coronavirus outbreak, the global banking sector has been hard hit across the value chain. As a consequence, a US-based bank encountered significant operational constraints as well as business risks. Also, the client was struggling to mitigate health risks for their employees and consumers. Besides, their traditional operating models were no longer helping them in ensuring business continuity.

The client, therefore, wanted to implement a dynamic and flexible operating model, take initiatives to protect employee health, establish an interim operational model for branches, and develop a support model for remote employees. They sought to collaborate with Infiniti Research to leverage their expertise in offering custom market intelligence solution.

Other key objectives of the client included:

  • To invest in boosting digital engagement and sales
  • To differentiate themselves in delivering value to consumers
  • To rethink the portfolio strategy for supporting the most hard-hit industries and segments
  • To build contingency plans for supporting customers in the post-COVID-19 environment
  • To enhance current digital offerings
  • To address technology gaps for offering a seamless digital customer experience
  • To offer payment holidays to customers for coronavirus related relief
  • To enable technology setup and infrastructure for employees working from home
  • To rebuild demand forecasting and capacity models for developing resiliency in the face of future demand shocks

As COVID-19 cases continue to increase in the United States, the nation has the potential to become the next epicenter of coronavirus outbreak. To succeed in the long-term, we can help you centralize cash management and enable seamless customer experience amidst the COVID-19 crisis. Get in touch with us.

Our Integrated Approach

To help the US banking industry client achieve their key objectives, the experts at Infiniti Research adopted a three-phased approach:

The initial phase of the custom market intelligence engagement involved working closely with the US banking industry client’s financial, technical, and marketing team to analyze the extend of the impact caused by the rapidly spreading COVID-19 pandemic and assess customer needs. This phase of the engagement also involved implementing a dynamic and flexible operating model to help the US banking industry client to ensure business continuity. Also, by monitoring the situation on a day-to-day basis for over four weeks, the experts helped the client to establish an interim operational model for its branches. Besides, by analyzing their key competitors, the experts recommended the client to enable technology setup and infrastructure for remote work.

The next phase of the custom market intelligence engagement involved conducting customer intelligence analysis and understanding the needs and requirements of customers in this challenging time. By conducting a thorough customer analysis, the experts recommended the US banking industry client to allow mortgage customers and small businesses to delay payments by 80 to 100 days. The experts also helped the client to embed financial fitness tools to create opportunities for human interaction. Besides, the experts helped the client to devise a customer-centric multichannel operational model and encourage digital migration.

In the last phase of the custom market intelligence engagement, the experts helped the US banking industry client to experiment with radical redesigns of their operating models and rethink the portfolio strategy for small businesses.

Business Outcome

By leveraging Infiniti’s custom market intelligence solution, the US banking industry client was able to implement a dynamic and flexible operating model, establish an interim operational model for different branches, and develop a support model for employees working at home. By reinforcing hygiene and cleaning protocols inside branches, the US banking industry client was able to protect employees and customers’ health. Besides, by closely analyzing China’s response to COVID-19, the experts recommended the client to dynamically modify branch hours of operation and closures while maintaining critical services for customers.

The experts also helped the US banking industry client in identifying third-party service providers to support them in enabling technology setup and infrastructure for remote work. This subsequently helped the client’s employees to handle calls from home while maintaining customer-data confidentiality standards. Besides, to serve customers at this challenging time, the experts recommended the client to promote personal engagement and program chatbots. Also, the experts helped the US banking industry client to launch a digital platform to help local community managers monitor the impact of the COVID-19 pandemic in their specific geographies.

By devising a sound marketing strategy, the experts further helped the client to enhance their current digital offerings and encourage more customers to use digital channels for banking needs. The experts also helped the client to speed up procedures to increase limits on online transactions and simplify password resets. By analyzing the client’s infrastructure capacity and network bandwidth and identifying weaknesses in architecture, the experts helped the US banking industry client to stabilize critical infrastructure and address technology gaps to offer a seamless digital customer experience. In addition to this, the client was able to rethink the portfolio strategy for small business and encourage relationship-based banking.

Request more info to know how our custom market intelligence solutions can help you to navigate the COVID-19 crisis.

Banking industry

Covid-19: Potential Implications for Companies in the Banking Industry

The coronavirus outbreak is causing widespread concern and economic hardship for businesses worldwide and the banking industry is hardly an exception. China has been worst hit, followed by Europe and the United States of America. While the duration and future impact of the coronavirus outbreak remains uncertain, major banking companies have already adopted business continuity plans such as establishing a central task force, suspending large-scale gatherings, and making arrangements for teleworking. However, these basic steps and actions can no longer help banking companies to maintain profitability and smoothly run their operations. For banking companies, enforcing a sound business continuity plan is the key to survive through these tough times and emerge stronger in the future. To help save your business from the ongoing crisis, our market research experts have outlined the strategies for banking companies to respond to the coronavirus crisis.

Covid-19 pandemic is impacting the banking industry in multiple ways, from workforce and business continuity issues to the client service considerations. Our market intelligence experts can help you to create strategic plans to combat the covid-19 challenges with resilience. Request a FREE proposal here.

Banking Industry: Practical Steps for Responding to the Coronavirus Crisis

Normalize workforce measures

Labor shortage issues in the banking industry are putting high pressure on business leaders to run operations smoothly. This further results in greater delays and subsequently, customer dissatisfaction. Today, major banks have adopted proactive measures such as emphasizing workplace hygiene and offering alternative ways of working, but banks will need to make sure that the measures they have taken are designed to get the best out of their employees while preserving their mental and financial well-being. These involve ensuring deep cleaning of all branches, identifying infected individuals, ensuring continuity of main services with minimal staffs, and monitoring customer service capacity against need.

In cases of trading activities, execution is becoming difficult for companies in the banking industry owing to constraints in working remotely because of technology and compliance requirements. To tackle this challenge, some banks have segregated employees and activated business continuity plan sites. However, in the case of this prolonged crisis, banking companies will need to take backup plans that include the potential to move immediately to a work-from-home model. Also, banks should train segments of employees for whom working remotely is possible for the new working environment. Subsequently, companies in the banking industry must make sure that both employee relations and internal technical support are sufficiently staffed and trained to accommodate elevated levels of business. Besides, companies in the banking industry must consult with risk management service providers to employ risk management strategies.

Analyzing and combating business risks is not an overnight task, it requires proper planning and execution. With over 15 years of experience in devising risk management strategies for organizations across various sector, we can help you to create an ideal business risk management framework for your organization. Contact us here.

Provide essential banking services to retail customers

At this critical time, people especially the old generation who are less likely to adopt digital channels, will need essential banking services such as ATM operations to fulfill their daily needs. So, banks must ensure to continue branch and ATM operations, without compromising the safety of employees. Besides, banks must continually assess consumer demand for in-person services and adjust capacity accordingly. For instance, Chinese government adopted strategies like providing limited services to customers, other than ATM access. Besides, banks in Hong Kong, Italy, and Germany have reduced working hours and are operating with minimal staffs.

At the same time, companies in the banking industry must try to encourage customers to leverage digital channels for banking needs. This can be done by increasing the limit of online activities and providing tutorials online. However, a shift to digital banking may increase fraud and information security risks for companies in the banking industry. Therefore, banking companies should consider implementing risk management strategies before the widespread adoption of digital banking services.

Support households and businesses with credit

As individuals and businesses who are already in debt are more likely to be financially impacted by the quarantine measures and lack of employment, companies in the banking industry should support their liquidity needs through credits. From a credit perspective, banks must identify sectors that are highly affected by the coronavirus outbreak and offer supports. This can be done by engaging with clients to understand their issues, segmenting customers based on their needs, and adjusting risk mitigation actions accordingly.

The impact of covid-19 on supply chain operations have been dramatic, compelling major businesses to draw on credit lines to support working capital and stockpile cash. Consequently, adopting strong internal liquidity-management practices will be required for banks to effectively support market liquidity and changing customer borrowing needs. Besides, companies in the banking industry should stay vigilant about liquidity measures to support their customers. In addition to this, banking companies should focus on business continuity planning, rethink balance sheet challenges while managing loan, find ways to trim costs and replot the post-covid-19 strategy.

Want to understand the potential impacts of the covid-19 pandemic on your organization? Request more info and our experts will get in touch with you with comprehensive insights.

banking sector

What Lies Ahead for Asia’s Banking Sector?

The way in which Asian customers are exploring and changing the way they consume banking services and use digital channels for their banking needs is rapidly transforming with each passing year. The openness and agility to understand and embrace these changes will reward banking sector companies. This will be the only way incumbent banks can survive in the Asian banking sector in the long run. This article entails a brief Q&A session wherein banking industry experts at Infiniti Research answer some key questions relating to the changing banking sector landscape in Asia.

Banking sectorOver the next decade, what are some of the most disruptive factors that could transform the Asian financial service sector?

Currently, the Asian banking sector is going through a period of turmoil. The environment in Asia’s banking sector is being largely influenced by geopolitical challenges, trade wars, and other political concerns. These could prove to be the three most disruptive factors concerning Asian banking companies and which can play a significant role in the banking decision taken by companies over the next decade. However, Asia being one of the biggest and the most lucrative markets for banking growth, companies in the sector must find new ways to adapt to these unfavorable conditions.

Struggling to stay relevant amidst the fast transformations in the banking industry? Request a free proposal to know how our market intelligence solutions can help you keep a close watch on the changing market trends and make strategic moves to adapt.

What can CEOs of banking sector companies in Asia do to cope with these disruptive forces?

CEOs of banking companies in Asia must ensure that they are up-to-date with the changing market conditions. This includes the need to keep the costs at bay. Despite the margin squeeze and the pressure on volumes, companies in the banking sector must aim to discipline their costs. It is also crucial for them to strategically manage risks. This involves not only the creative risks that they take on board but, also the conduct risks. Banks also need to be aware of the increasing scrutiny that is being placed on dealing with customers. Finally, it is also necessary for CEOs must effectively manage their balance sheet and capital.

What are some of the best ways for banking companies to stay relevant in the digitally-inclined market?

In the current fast-changing banking sector, where there is an increased focus on the digital landscape, incumbent banks will need to scale up their capabilities in four critical areas. This includes digital marketing to enhance customer acquisition and engagement, value-generation through digitally active consumers, leveraging customer data efficiently to provide a differentiated proposition, and embedding banking in customers’ daily lives for seamless banking transactions.

A deeper understanding of the changing trends in the banking sector is critical for companies to adapt and provide a frictionless experience to customers. Do you find gaps in your business in effectively meeting these needs? Get in touch with a banking sector expert from Infiniti Research and tell us more about your challenge.

The Evolving Retail Banking Landscape in Canada

Retail banking

Over the past couple of years, Canadian banks have set a global standard for their stability and best practices. However, the pressure on retail banking companies and other financial institutions in Canada remains high. This is making innovation and customer satisfaction more important than ever before for players in the retail banking sector. Innovators in the retail banking industry are moving towards a seamless, one-stop-shop approach to service and engagement via digital platforms that bring products and services together to provide a unified customer experience. Interestingly, technology is not the only factor that’s disrupting the industry; it is also characterized by the rising need for customer-centric experiences, and this is driving every transaction and touchpoint for companies in the sector. Here are some critical retail banking trends that experts at Infiniti expect will lead the momentum of the financial sector in Canada.

Canada’s retail banking sector will see several opportunities to capitalize on and challenges to dodge this year. Not prepared with the right strategies to thrive? Request a free proposal to know how our solutions can help you keep a close watch on the market and formulate effective strategies to succeed.

Retail banking trends in Canada

Unbundling services

Canada will soon be exposed to open banking regulations that will fragment traditional retail asset and liability gatherings. Open banking refers to common interfaces among banks and third parties to facilitate more competition and also create new business opportunities. Although retail banking companies had sought a vertical approach that offers services from top to bottom over several decades, now several new entrants in the retail banking industry want to be ‘horizontal’ and dominate an attractive specialty.

Planning to Invest in Canada’s retail banking industry? Get in touch with our experts for more insights on the benefits of leveraging our solutions for better decision-making and choosing the right market entry strategies.

Rising interest rates

Interest rates are gradually rising from historic lows and consumers are soon bound to be challenged by debt levels. The retail banking industry will reflect the changing environment with an increased focus on the impact of rising interest rates, transparency in lending, and innovative new value propositions. The continuing rise in rates may result in personal loan offers to decline, however lending solutions such as installment loans and point-of-sale financing will shift the market towards time-sensitive credit sources.

Platformification

Innovation is vital for retail banking companies to effectively meet consumer demands. The financial services industry in Canada now largely revolves around the digital age and rising consumer expectations of convenient and frictionless digital access. As a greater number of consumers seek streamlined solutions, retail banking companies in Canada will soon shift their focus to providing ‘one-stop-shops’ that bring both products and services on a single platform.

Learn more about Infiniti’s solutions for companies in the retail banking industry.

Pricing strategies

Banking Industry Price Analysis: Identifying innovative pricing opportunities for a retail banking Client

Although modern banking companies have invested heavily in efforts to improve customer experience, most of them tend to overlook ways to innovate their pricing strategies using effective banking industry price analysis solutions. Banking sector companies generally react to the changing regulations on product structures by modifying their pricing tactics to emphasize more on costs and risks. Meanwhile, several other sectors including airlines, ride-sharing services, hotels, and digital media continue to experiment with innovative pricing strategies, and their customers seem to have accepted the new pricing schemes with little resistance. Over the past couple of years, a few players in retail banking have made strategic pricing a core discipline and have consequently established a dominant presence in the industry.

Is your business up-to-date with the latest pricing trends in your sector? Request a free proposal to know how experts at Infiniti can help you develop optimal pricing strategies for your business.

Business challenge

The client is a renowned retail banking company based in Central Europe. Despite the banking sector slowdown in Central Europe during the 2008-09 global financial crisis, the sector is gradually benefitting from strengthened regulations and growing market opportunities. The client was facing predicaments in identifying customer needs and keeping up with the changing customer expectations in the retail banking sector. Furthermore, they wanted to fix the misalignments in their existing pricing strategy. With the help of Infiniti’s banking industry price analysis, the client also sought to optimize pricing innovations and boost promotional activities in order to attract the millennial crowd.

Pricing for products of services in a highly competitive market could prove to a highly challenging task. Get in touch with our analysts to know how our pricing solutions can help you risk-proof your pricing decisions.

Importance of banking industry price analysis

banking industry price analysis

Solutions offered

The experts at Infiniti Research followed a three-phased approach to banking industry price analysis. The first phase of the banking industry price analysis solution involved identifying the target customers and grouping them into various sub-segments. The second phase of the banking industry price analysis included understanding the needs of different retail banking customer groups and pinpointing the gaps in fulfilling their expectations. The final phase of the banking industry price analysis involved a comprehensive study on different innovative pricing strategies followed by retail banks in the central European market as well as those of prominent retail banks in other countries and shortlisting the most attractive and feasible ones for the client.

By leveraging Infiniti’s banking industry price analysis, the retail banking client was able to categorize different customer groups and create targeted promotions for each of these segments. They were able to understand where they fell behind in terms of their existing pricing strategies and more attractively align the prices of existing products and services. Using the banking industry price analysis, the retail banking company was also able to implement promotional activities such as cashback rewards to attract younger consumers.

Learn more about Infiniti’s banking industry price analysis solution

Banking industry trends

Top Banking Industry Trends Dominating the European Market

Banking companies across Europe are gradually moving from traditional banking techniques to digital banking in order to enhance customer experience and stay competitive in the market. Although European banks are facing the heat from increasing political volatility, new regulations, and persistent questions about the technological transformation of banking, the sector is expected to mark a positive growth in the next few years. Experts at Infiniti have identified some of the most attractive banking industry trends that will dominate the agenda of European banking executives and will transform the industry in the years to come.

Bankers across Europe believe that technology and process innovation will transform the retail-banking landscape in the next three to five years. Are you prepared for this change? RFP to know how our banking industry analysis can help you stay updated with the opportunities and challenges in the market and formulate effective strategies to stay competitive in the market.

European banking industry trends

banking industry trendsDigitalization of corporate banking

As the continued dissatisfaction of national and multinational companies relating to service dissatisfaction becomes impossible to ignore, corporate banks are finally making the leap to go digital. The back-office operations such as cash management have already been digitalized and are expected to extend through middle office (which involves the creation of new banking products) and front office (relationship managers will get hands-on experience in using digital tools) operations this year.

Growth of Fintech and RegTech

Last year, Fintech and RegTech spending continued to proliferate in EMEA’S emerging markets. With new firms entering the competitive environment, such banking industry trends will continue to persist. Banking industry trends such as increasing spending on FinTech and RegTech is intrinsically linked with improving levels of financial inclusiveness.

For more insights on how to better understand banking industry trends and threats, as well as how European banks should respond to them, get in touch with our experts!

Open banking standards

Banking industry trends like open banking has taken the more advanced economies of EMEA by storm. In open banking retail/corporate customers are in control of sharing their financial assets and personal data with third-party providers of their choice. To enable this, banks open-up and share their infrastructure (including data and functionality) and documentation (code) with third parties, usually through Application Programming Interfaces (APIs). An open banking standard prescribes the steps which banking sector companies must take. In Europe, several top banking corporations are making a collaborative effort to create an open API standard.

Technological innovations to promote financial inclusion

One of the most prominent banking industry trends this year will be to connect and reconnect customers to the financial system. While advancements have been made to bridge the gap between people having access to banking services and those who do not, progress needs to move at a faster pace. This requires the collaborative efforts of national governments, financial service providers, telcos, and other technology vendors.

Acceleration of platformification

Bundling together multiple services into one online platform is known as platformification. Banking industry trends such as platformification is aimed at providing an efficient, automated, and integrated customer experience. This consequently drives improved financial and operational performance.

Know more about Infiniti’s market intelligence solutions for the banking industry

banking sector

Category Scan: Retail Banking Market Updates and Future Trends

The retail banking industry is undergoing a wave of change. To lead the change, it is essential for retail banking companies to choose the right business strategy. Experts at Infiniti Research have engaged in discussions and surveys with top global banking leaders and several retail banking customers to gauge their opinion on the changing retail banking landscape and gain a better understanding on the upcoming trends in this sector. A fair majority of the prospects who engaged in this discussion agreed that technology is rapidly morphing from an expensive challenge into a potent enabler of better customer experience and effective operations. Despite this, attracting new customers is one of the biggest challenges facing retail banking companies today.

The article below scans the category for retail banking services in its entirety to help companies and customers in the sector to understand and stay abreast of the latest news, innovations, and market developments.

Retail Banking: Recent Innovations and Market Updates 2019

retail bankingPersonalization is the new normal

Personalization is gradually becoming a primary mechanism for retail banking companies to enhance their customer satisfaction as well as to increase their economic value. Customer retention is often seen to be higher at banks that understand customers’ financial needs and interact with them in ways that reflect their preferences. In an era of hyper-personalization and competitive pressure, retail banking customers expect meaningful insight and advice-on-demand from their retail banking partners apart from the speed and convenience of transactions.

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More local markets may close for outsiders

Traditionally restricted markets including China, India, and Korea will be joined by others in the case of restricting market share for foreign institutions through local regulation and subtle preferences wherein domestic institutions are more favored. Consequently, the ability of emerging market financial institutions to penetrate markets outside of their home countries will become limited. This can only be avoided in case the regional and bilateral trade agreements concluded over the next five years drives select opportunities for certain institutions where financial services are included in the scope of the agreements.

Branch banking will undergo significant transformation

As technology enables every aspect of online retail banking, reducing the usage of hard cash, traditional branches are slowly losing their importance. Given their high-fixed cost, branches will need to become increasingly productive, or significantly less costly. Several retail banking companies have already begun cutting down on staffing, closing the most unproductive branches, and have started experimenting with new branch concepts. These trends are expected to accelerate as customer demands and expectations evolve. However, we do not expect branches to face a full shutdown, rather they may continue to function as centers for flagship information, advisory and engagement hubs, and provide smart kiosks that offer service, sales, cash, and video contact with a range of specialists. The branch size and costs will be reduced by introducing new models and migrating transactions to low-touch digital channels. Although the human touch will always be available, digital channels are expected to dominate the future of retail banking sector.

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Cybersecurity will be paramount

Recent cases of high-profile data breaches have generated fear and uncertainty among retail banking customers, prompting retail banking companies to undertake strict measures to curb such incidents. As the regulation over cybersecurity is rising, banking companies will need to do more in terms of intervening and keep pace with the constantly growing and changing cyber threats. It is expected that by 2020 leading banks will have developed advanced cyber-security strategies that are more aligned with their business aims, risk-management protocols, and regulatory requirements. Since many banks lack the capabilities and resources to tackle these issues on their own, such companies will partner with third parties to leverage such strategies.             

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