From the outside, the banking industry looks as strong as it has since the financial crisis of 2008. Banks have benefited from a modest increase in interest rates, continued strong loan demand and relatively calm regulatory waters. Over the past several years, improved cost controls and the benefit of new technologies and automation have kept profitability strong. But the real challenge may be ahead for most organizations.
There has never been a greater need for traditional financial services organizations to become ‘digital banks’. Until now, most banks and credit unions have simply put a nice veneer on legacy systems and products, ignoring many of the internal changes that are needed to compete effectively with smaller fintech and big tech organizations. Once considered competitors, fintech firms have become part of the mainstream banking system, allowing institutions to innovate beyond what was possible in the past.
Globally, the retail banking industry is being expected to deliver a seamless digital customer experience, as found in our 2019 Retail Banking Trends and Predictions report. Investments in digital technologies have increased to respond to consumers’ constantly evolving demands, but the changes made by most institutions only scratches the surface of what is needed.
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