Key trends in Retail banking in 2014 and beyond

Whitepaper | June 2014

The financial services industry is currently being pulled in multiple directions in terms of technological development, customer expectations, and industry disruptions. With so many developments in the industry and competing scenarios regarding the future of banking it is important to prioritize trends and patterns to define a robust and effective strategy for your bank going forward. At Fisa Group we keep tabs on developing trends to develop a vision of what banking will look like tomorrow and to help our clients prepare their businesses for this vision.

  • Drive-to-Digital: The digitalization of channels has unlocked significant opportunities for banks to enhance their customer experience and boost revenues and reach. At the same time digitalization has placed significant power into the hands of customers, forcing banks to re-design their business models to accommodate for increasingly demanding customer expectations. As mobile penetration grows and channels multiply users will expect to conduct transactions of increasing complexity with equal levels of security interchangeably on all digital channels. This implies greater convergence of functionality between digital channels as each channel will have to serve as a substitute for any other channel.
    The drive to digital has also drastically reduced physical barriers to market penetration (a side-effect particularly relevant for developing markets), as a physical branch or service point is no longer needed to provide the full product and service palette to customers.

  • Cross-industry benchmarking: Customers no longer see different industries and companies as silos to be compared within their respective groups, but they see them as converging counterparts, which should all provide similar levels of service and access. Banks cannot simply compare their customer experiences to those of other banks, but must begin to compare themselves to other industries and standards upon which the customer is defining his or her expectations. This presents a challenge for banks that may lag behind industries with more developed customer experiences but also provides an opportunity in that best practice standards and a rough success path have already been tried and tested.

  • Cross-company and cross-industry convergence: Digitalization has also created a drive towards service and information convergence, which still has large untapped potential. Customers may use their iPhone to access account information from three different bank accounts using three different bank account applications or may access 4 different websites to access frequent flyer program points or hotel rewards. The need for convergence is reflected in the success of apps such as “Mint” that serve to consolidate financial information from different banks and credit cards and even offer customer experiences above those of some bank-native apps. Other examples include connectivity between utility companies to carry out e.g. electricity payments directly from your internet or mobile banking apps without external input.

  • Omni-Channel functionality: The next frontier in channel management is true integration of the customer experience across all channels. It is no longer enough to digitalize services channels, these channels must be seamlessly integrated and must cooperate with each other efficiently and invisibly. Customers expect a seamless and integrated experience when interacting with physical channels as well as digital channels and expect to seamlessly switch between channels in real-time. Customers may speak with a representative on their iPhone but execute a transfer on their iPad and want to view confirmation on their laptop. The complexity of this trend will increase as wearable technology channels such as watches and Google glass become more widespread.

  • Payments: From Bitcoin to mobile payments, the payment process is currently splintering in various directions, several of which may generate disintermediation if banks are not able to react to the changes taking place. Mobile payments are on the rise and the necessity of card services is no longer a given. Payments innovation is not only a technological question (mobile, contactless etc.) it is also an value chain question, with more and more retailers attempting to take larger chunks of the payment process into their own hands. Thus banks must work hard to keep their payment mechanisms and facilities relevant to the changes currently taking place. Regulation and security concerns are serving to slow-down the natural pace of development in this area but it is no doubt a trend with significant momentum.

  • Customer-Centricity: Traditionally banks have gotten used to “pushing” products, channels and services towards their customers, but with the advent of digitalization and cross-industry comparability, customer expectations have grown sharply and power has shifted to the customer. Banks must recognize that customers now dictate the terms of business and business models must be adapted to reflect that. Customer centricity involves placing the customer at the center of the business model by ensuring that there is a customer-driven justification for most important business decisions.


Disruptive innovation and rapid change in the financial services industry will rapidly change how banks communicate and interact with their customers and will force banks to redesign their business models. It is key to be prepared to adapt to these trends and patterns in order to retain customers and remain competitive in the market.

If you would like to learn how Fisa Group can help you to design a vision for your “bank of tomorrow” please get in touch with us:

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