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New paradigm in retail banking driven by mobile innovation

Over the past few years, we’ve seen the global banking sector transform itself.  It has become even more accountable, transparent and innovative, as it aims to improve relationships with customers and better serve them. This has equated to a thriving sector fuelled by technological innovation.

However, as banks evolve to better meet the demands of their clients, and remain competitive, it is essential to understand the wider trends that are impacting the banking industry.  What do they need to consider as they stay ahead of the game?

According to Jim Marous, publisher of the 2016 Retail Banking Trends and Predictions, the top 10 trends most referenced by close to 100 global financial service leaders were as follows:

  1. The ‘Platformification’ of Banking
  2. Removing Friction from the Customer Journey
  3. Making Big Data Actionable
  4. Introduction of ‘Optichannel’ Delivery
  5. Expansion of Digital Payments
  6. Executing on Innovation
  7. Exploring Advanced Technologies
  8. Emergence of a New Breeds of Banks
  9. Mining New Talent

10.  Responding to Regulatory and Rate Changes

Many of these trends are already having a major impact on banks today. In the long-term the glue that will bind all of these trends together is digital – or, rather, mobile.  This is fast becoming the catalyst for innovation in the digital age.

Regional banking markets vary in sophistication and there are many areas where mobile can create greater opportunities. Especially when you take into account that there are approximately 7.19 billion mobile devices in the world (as of 2014), it is no surprise that people use them to automate, enhance and manage many aspects of their day-to-day lives.

This is especially true of mobile banking. Javelin Strategy & Research has predicted 111 million mobile banking users will adopt mobile banking by 2016. This implies there is a strong and powerful link between banks, mobile and mobile’s potential to transform banks’ relationships with customers when juxtaposed against these trends.

Naturally, and for obvious reasons, a lot of the future thinking of banking has been driven by the mobile-savvy millennials who are next in line to be the world’s big earners, as they come to dominate the work place. They would much rather use their mobile apps and services to manage day-to-day banking interactions and transactions over visiting physical branches.

The bottom line is, mobile banking is taking off across the world, among millennials and other generations alike too. Consider this account of mobile adoption from CACI and BBA. Europe has an advanced mobile retail banking sector, and by 2020 UK customers, for example, will use mobile devices to mange their accounts 2.3 billion times, which is more than account management via Internet, branches and telephone combined.

This figure implies that it is important that banks embrace and recognise the power of mobile regardless of people’s age. In the end, this means that a key differentiator for retail banks, globally, will revolve around their capabilities to form and enhance relationships and offerings to their customers by providing the best mobile banking tools and solutions.

In the end, banks that don’t evolve or develop their mobile banking strategies do so at their own peril.  While millennials will demand mobility, the rest of us aren’t far behind. 

 

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