By 2030, technology will have made banks and banking invisible to customers, hidden by Siri-like personal assistants that cull data from our connected lives to fulfil daily personal and financial obligations, claims KPMG.
This revolution will see large parts of traditional banks - customer service call centres, branches and sales teams - disappear, predicts the professional services giant in a report.
This will leave the future of today's banks uncertain, and in a worst case scenario they could become relegated to the position of white labelled product providers. The winners will be those that are able to make best use of their data, drive down costs, build effective partnerships with third parties, and build strong cybersecurity.
To illustrate its vision for banking in 2030, KPMG has imagined a Siri descendant called EVA (Enlightened Virtual Assistant) that uses advanced data analytics, voice authentication, AI, connected devices, APIs, and cloud technology to serve customers.
In an example of a day with EVA, the assistant approaches the customer having accessed its payment data and noticed an increase in spending on junk food. Coupling this with health data gathered from the customer's wearable device, EVA suggests a yoga class and then books and pays for it.
Asked by the customer about their finances, the assistant then explains that it has "shifted some savings around to get you a better interest rate and there was an unexpected charge from the USA which I have arranged a refund for".
In this vision, there is no "banking app" - access to money is interwoven with health, time management, leisure and other parts of daily life. This means that the "platform layer" - the customer interface - is likely to be provided by global technology players such as Google, Apple and Facebook.
Banks can own the product layer - product, balance sheets, security and custody of assets - but a new wave of utilities - outsourcers, fintechs and existing giants such as Visa - will emerge to win the process layer, facilitating things like payments, client onboarding and KYC.
Warren Mead, fintech lead, KPMG, says: "Banks are making efforts to improve customer service through use of exciting technologies like robotics, artificial intelligence and blockchain, but the pace of change is slow and in reality, I’d say banks are only 10% of their way through their digital transformations.
“Getting most banks to our vision of 2030 will be painful. Currently, technology firms invest 10-20% of revenues into research and development, for banks it’s just 1-2%. With banks’ return on equity under 5% it’s hard to see that changing significantly in the short to medium term, but if firms want to remain relevant, it has to."
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