EIU – Priority for Retail Banks Shifts to Digital from Regulation

50% of the respondents were C-suite or board level and the rest were senior executives, drawn from across the world. With 22 of the respondents, The EIU carried out in-depth interviews, some global, some traditional banks, some new banks and some more disruptive financial service providers.

The results have provided a valuable insight into how much has changed over the past year. Customer expectations are driving digital strategies whilst technology firms and e-commerce giants are threatening to take market share.
Read this in-depth, thought provoking paper to find out more, such as;

• Where do banks see their biggest competitive threat in the next 5 years?
• Do banks still think regulation will have the highest impact on their industry?
• What are the business drivers of a bank’s digital investment?
• Does retail banking promise profit in the future?
• Is internet banking already old-hat? 

Find out the answers to these questions and more in a unique research paper that captures how the issues facing retail banks around the world have changed in the last year, illustrating just how far the needle has moved.

Future Factors: The three Rs of retail banking

Executive Summary

Eight years after the financial crisis, regulation still occupies retail banking executives’ time and resources. Thankfully, bankers no longer feel overwhelmed by constantly shifting rules.

This report therefore has a different tone from The Economist Intelligence Unit’s first report on the future of retail banking sponsored by Temenos and published in 2014. Change is now the common narrative, with three interlocking “Rs” affecting all retail banks. “Regulate” still resonates as authorities finalise efforts to police the system without stymieing economic growth. Equally challenging is “Revise” as traditional players work out their roles as customer expectations change rapidly. Further impetus comes from the start-ups and non-banking disruptors who aim to “Re-envisage” banking.

The danger of a systemic banking collapse has passed. Capital has been patched under Basel III rules. Yet, regulators and prosecutors have discovered that fining banks is popular and profitable. Extreme risk-taking has been tempered by compliance, cost and fear. Retail banks remain caught in the crossfire between the desire to protect taxpayers, the need to deliver essential services and the profit imperative. Can banks survive the onslaught? Yes, but only if they change—and fast. In a remarkable turnaround, the challenges and opportunities of a reworked banking model have matched or replaced those regulatory fears.

Banks need to rebuild trust. Customers want seamless service on their tablets and smartphones, in real-time at low or no cost. Fewer people are visiting branches—and when they do, it is not for basic transactions. Behaviour and technology now drive strategic thinking with expensive, painful implications for physical networks and staff numbers. Business models and the economics of banking will be turned upside down by 2020. To assess the state of play and the height of those ambitions, The Economist Intelligence Unit surveyed 208 senior executives at retail banks around the world, to learn how they are adapting to regulatory, customer and technology changes.