IBS Journal: The iconic monthly FinTech magazine

February 2020 issue out now! Subscribe now

Launching India FinTech Report 2020

Market sizing and forecast of Digital Lending, Payments, WealthTech & RegTech. Subscribe now

Leading Back Office Systems for Banks

In-depth Supplier Profiles and User Lists. Subscribe now

In-depth Banking Tech and FinTech Research

Over 300 research reports that's updated quarterly. Subscribe now

Open Banking is ‘moving banking goalposts’, Temenos says

Open banking and the emerging big tech players are the ones setting the standard for banks, according to predictions made for 2020 by Shrey Rastogi, Senior Payments Strategist at Temenos.

Discussing his forecast for the next year, Rastogi told IBS Intelligence that the proliferation of open banking and the entrance of big tech players into the banking ecosystem are two factors that are moving the goalposts for banks.

Shrey Rastogi, Temenos

Shrey Rastogi, Senior Payments Strategist at Temenos

“With new, agile competitors driving experiential banking and upping standards for customer experience, traditional banks face their greatest challenge yet. In order to survive, banks must deliver truly tailored customer journeys, securely, while respecting their customers’ privacy,” Rastogi said.

Branching out

As banking evolves, they will also increasingly look at other, value-adding services outside of normal banking activities, due to the current environment racing to deliver optimal customer experiences and retain customer loyalty, he continued.

In fact, Temenos and The Economist Intelligence Unit found that 36 per cent of retail bankers believe technologies such as artificial intelligence (AI), machine learning and blockchain will have the biggest short-term impacts, while the payments market will swell as a result of rising Internet of Things (IoT) adoption, cashless economies and digital currencies.

“We will see banks differentiating themselves by branching out into non-banking activities. For example, a bank could partner with a FinTech to give travel advice or find the best holiday suited to a customer’s specific budget. Or, using an AI bot that can monitor foreign exchange market fluctuations, banks might recommend when to book an overseas holiday or purchase foreign currencies.”

Evolving consumers

Rastogi further noted that Generation Z – the first generation of true digital natives – will have a greater impact on global banking and payments, encroaching on the market as the main banking customer base and creating a fundamental shift in how banking is consumed.

One shift is towards conversational finance and chatbots, as seen in China, where the younger, tech-savvy population is embracing mobile payments and solutions such as WeChat Pay, which is on track to handle one billion payments annually.

Rastogi said: “As China adapts its banking models to suit this new customer base, in 2020 we will see the rest of the world follow suit.

“Gen Z may not represent the most profitable customer base for banks at the moment. However, their numbers and influence will soon become so significant that banks will have no choice but to redesign their services to suit their needs and requirements.

“In 2020, banks will need to incentivise their products and services, adding value, personalisation and even gamification techniques in order to retain a customer base that is by nature less loyal to their bank than previous generations,” he said.

Related Posts