The nexus of forces (Gartner) is dawning on the retail banking sector and 2014 is going to see a steady acceptance of these drivers in various forms. This blog elaborates on these forces and makes predictions on how they will manifest in the coming year.

1. Data Rules the Roost!

This year sees the dawn of the golden age of the Data Scientist. The analysis, manipulation and summarisation of the huge amounts of data being captured will at last start to come of age and with it the realisation of the potential value add to the business.

Banks being large generators and repositories of data should not ignore the gold mine that they sit on and will do well to leverage on the unknowns that come out of the data. And even before seeking to make sense of so-called ‘Big-Data’ – data in the social sphere, banks will have to listen to and evaluate the data that they currently have. This can happen only if they separate the wheat from the chaff and understand patterns, which is where the data scientists come into play. Data de-duplication is a clear first step that banks have to take in order to reap the benefits bestowed by these data Oracles. Subsequently graduate and post graduate research scholars in math and statistics will be in great demand and we will also see the mushrooming of institutions providing course contents in domain specific data studies.

2. Leverage Your Customer/Partner Device

There is a clear and present opportunity for banks to cash-in on the rise of mobile accessibility this year - ignore it at your peril! With an exponential increase in content consumption happening on mobile devices, banks should look increasingly towards how to leverage this, thus enabling both acquisition and retention of customers.

Many bank chief security officers turn off when they hear the phrase BYOD, and hint - usually with a chuckle - that these are not for banks where security is paramount. Consequently CIOs do not have an active strategy to look at devices beyond what the bank controls through its security norms. This year will bring the understanding that it is not BYOD in its raw form that is going to change the landscape, but how banks that adopt a well thought through strategy for LYCD/LYPD will gain. CIOs should realize that it is not the case of employees bringing their devices into the bank that will bring competitive advantage, but how the bank reaches out and interacts with the devices held by customers, agents and employees.

3. Transparency Towards the Customer

If the last few years have seen regulatory activism, 2014 will be the beginning of consumer activism when it comes to banks. With the implementation of consumer friendly strategies such as account portability, banks will do well to start investing into technology and solutions that display and encourage higher levels of transparency towards their customers. Consumer friendly banks that take the lead in ensuring their customers have a say in crafting products and their delivery, will capture attention. Building trust by listening to all stakeholders will become a cornerstone for a few banks in their marketing agenda. This is another area where LYCD comes into play when banks can elicit response and feedback by directing targeted questions to their customers through the latter’s devices.

4. Capturing Business Moments in the Value Chain

While banks have been doing this well in the corporate and commercial sector, Retail banking heads will grapple with this question this year. The challenge for Retail business unit heads is how to ensure their bank’s presence and influence in all the retail business moments that occur at any given time in the market place. When customers enter a car dealership, or when they buy a new insurance policy how does the bank capture this business moment, be there for them and ideally benefit from the transaction. This is going to be the banks’ biggest challenge in the Retail space and leveraging customer and partner devices will be of assistance in this area. We will see some innovative approaches in this area to predict and capture these moments – this will also be a step to solving the age old puzzle of “share of wallet”.

5. Beginning of the End of Complex System Integration

This year will be a watershed for complex integration projects, with a few banks announcing that they have successfully performed complex platform transformations in record time. The trend will be towards leaner more technologically intelligent integration projects. System integrators dependent on this business will do well in building teams well versed in standards such as BIAN, ISO 20022, SOA with a more granular approach, in order to play the role of a mature plumber of systems. CIOs will take into consideration the cost of implementation and integration into their total cost of operation and a few vendors will do well in creating transparency in this area.