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Are we building the right foundations for banking innovation?

The future of banking could be closer than we think. As the industry continues to build the bridges between the financial services of today and the financial services of tomorrow, the pockets of innovation coming to the fore are impressive. From AI powered credit applications[i] to ATMs offering loan applications within five years, outputs from research and innovation hubs, alongside a wider recognition that more aggressive change is essential, are setting the foundations for a new era of banking.

In 2022 European banks are anticipated to spend one third of their total IT spend on new technology[ii], signalling an ongoing investment in service modernisation. This industry commitment to the ongoing evolution of financial services means two things; not only can we catch up with those sectors that are leading the way with a future thinking mind-set, but also that services will take a more consumer first approach.

But whether its small incremental changes or organisation-wide rollouts, there are some key factors to consider to ensure innovation and change are managed effectively:

1. Listen to your customers

Only by taking a truly customer centric approach will new innovation work and technology adoption be successful. From net promoter scores and customer feedback, to in-branch intelligence - this data is truly invaluable to tailoring service offerings.  

Many of us say we are customer focused but it’s all too easy to be distracted by internal or conflicting priorities, and forget to consistently map transformation in line with customer needs. The power shift now tips heavily in the consumer’s favour and so listening to customers has never been more fundamental to remaining competitive. After all, if you don’t listen, someone else will.

2. Location, location, location

Financial services are becoming more connected than ever, helping to dissolve the barriers between historically siloed channels.  With a more consistent look and feel between services, consumers can move more seamlessly between physical and digital banking; but careful consideration still needs to be given to the delivery of each of these channels.

For example, as the industry pushes for a shift back to more personal banking, branches should act as experience hubs to provide the essential one-to-one interaction which adds real value to customer relationships. ATMs offering additional services such as loans should be located in branches or pods to ensure security for consumers, and mobile banking services should overarch all channels to connect the dots.

It’s all about offering the right services in the right locations to get the best service mix for the consumer.

3. Involve and educate

It’s natural human behaviour to avoid things we either don’t understand or things that seem too difficult. This highlights the importance of customer collaboration when approaching innovation and taking customers on an educational journey when introducing new services.

A study shows that some banks aren’t quite there when building the foundation for an emotional connection to facilitate this, with respondents rating their primary bank 13% lower than their favourite brands when asked how easy it was to use its products and services[iii].

While millennial and Gen Z customers might instantly embrace new technology, others may need a longer adoption process. Therefore one of the key challenges for banks is to develop – and implement – a technology strategy at a rate that suits the multiple demographics within their customer base.

By supporting the on-going integration of innovation and value-added financial services, banks are bringing tech to the fore for consumers and bridging the physical and digital gap; helping them achieve a competitive, customer-focused strategy, but also crucially enabling them to deliver the integrated services consumers are demanding both now – and for the future.



[i] Redefine Banking with Artificial Intelligence, Accenture 2018

[ii] 2020 Banking and Capital Markets Outlook, Deloitte 2019

[iii] Accelerating Digital Transformation Banking, Deloitte 2018



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Matthew Phillips

Matthew Phillips

VP, Head of Strategic Advisory Services, Eurasia

Diebold Nixdorf

Member since

20 Sep 2017



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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

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