It’s been an exciting year in the banking sector. Last week’s announcement that challenger bank Revolut has been granted a European Banking License proves that digital-first banks are no longer just the alternative chance but a real danger to legacy financial
institutions. Barclay’s has already made a clear statement in their hiring of Starling Bank’s Chief Product Officer Megan Caywood to head up consumer strategy. Along with innovation being pushed along by the industry, there has also been the pressure of regulatory
change. With that, it seems like an ideal time to look to the future and imagine what the retail bank of the future may look like. Here are my predictions room the trends we’ll see emerging or continuing in 2019…
#1, Big banks go small scale:
“After the IT and customer experience struggles the biggest UK retail banks have faced in 2018, they are now looking to innovate. For this, they are turning to agile and innovative start-ups, providing them with the deep pockets of incumbent banks. Uniting
the stability of established financial institutions and the digital-first approach of new entrants could lead to some interesting hybrid confirms who embrace the best of both worlds, delivering both superior customer experience and reliability.”
#2, Open banking goes mainstream:
We’re yet to see a dominant ecosystem for open banking emerge. As consumer awareness of the programme and its benefits grow, it will become a race to develop the first widely-adopted platform. Those who can reach a critical mass of users will secure huge
numbers of long-term customers, providing a stable base to depend on through the next few years of disruption in the sector. Fin-techs who make the grab for immediate customer interactions now, even when these customers bank with an established brand, could
benefit greatly from increased brand recognition. “
#3, The AI stockbroker:
AI can make quick decisions based on previous patterns. This makes them good at calculating risk and purchasing stock. We’re already seeing some hedge funds trust their investments to AI stockbrokers. But 2019 could be the year that these services become
available to a much wider set of retail banking customers, similar to HSBC’s robo-advisor trial announced this month. But AI still has its limitations – the implementation of technologies will only deliver true benefits for customers when unified with human
creativity. So, going into 2019 we’ll see far more enterprises get smart about how they are implementing and leveraging these technologies.
I’m excited to see how the sector embraces new technologies and navigates new challenges in 2019. What do you think?