Innovation in Retail Banking – banks disappoint themselves!
By Robin Amlot
Only 7% of banks replying to the latest annual Innovation in Retail Banking survey by Infosys Finacle and Efma said they have deployed digital transformation initiatives at scale with commensurate benefits – in other words, 93% are disappointed in themselves! Further, many banks have shown a dip in their self-perception this year, with only 9% saying they were innovation pioneers, compared to 14% last year. Scaling digital transformation, improving customer engagement and cost management emerged as the top three priorities going forward, with focus on agility driven by cloud adoption. Respondents spoke of increased investments in mobility, advanced analytics and open banking APIs, as areas expected to have the biggest impact on banking over the next 12 months.
Key takeaways from Innovation in Retail Banking
- Banks have identified 7 keys to digital transformation, with the most important components being leadership/culture, data and analytics and CX
- While there is an understanding of the importance of digital transformation, most firms rate their efforts as insufficient, with 62% stating their digital deployment as partial or digital investments not delivering as expected
- Respondents voted their three biggest challenges for undertaking digital transformation as – time and cost of implementation (71%), system integration (66%) and legacy technology landscape (62%)
- Mobility (73%), Open APIs and AI / Advanced Analytics / Machine Learning (64%) were seen as the most important technologies having the biggest impact on banking over the next 12 months, with cloud computing (58%) being an area of great importance in the future.
- Much of the innovation in 2020 was seen as having taken place in Lending (40%) and Payments (38%)
- Over 64% identified product delivery channels as an area which would see an overwhelming preference for innovation over the next five years
Sanat Rao, Chief Business Officer & Global Head, Infosys Finacle, said: “Amidst the pandemic challenges, ensuring employee safety, fulfilling remote service delivery and extending credit lines to help business clients have consumed banks’ attention. At the same time, banks have also had to allay shareholders’ concerns about growth, profitability and valuations. The Efma-Infosys Finacle Innovation in Retail Banking research results highlight that the only way to balance these priorities is to scale digital transformation, across customer engagement, cost management, business model innovation and people empowerment. While digitising at speed and scale is the only way for banks to survive, revive and eventually thrive, the study reveals that banks have a long way to go on the implementation front.”
John Berry, CEO, Efma added: “This year has proven that more than ever the financial services industry continues its evolution towards digital banking transformation. Even the most innovative players are now facing strong competition from tech companies and fintechs and must continuously innovate to stand out. Customer engagement is centre stage for future success.”
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