Vision 2020: What Will Retail Banking Technology Look Like in 10 Years?
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Introduction
Predicting the medium-to-long term future is a delicate, yet surprisingly difficult, task. On the one hand, futurology positively encourages unbridled exuberance where retail banking is concerned. On the other hand, it's easy to play safe, and suggest that the sector will remain fundamentally unchanged a decade from now. Ovum’s view is that the most likely outcomes will lie somewhere in-between.
Features and benefits
From a market focus perspective, when compared to 2010, the environment that retail banks operate will not look vastly different in 2020, although macro-economic, regulatory, and commercial pressures will have varying degrees of influence.From a business focus perspective, with their wings severely clipped by governments, central banks and regulators following the industry crisis of 2008/09, the years between 2010 and 2020 will be characterized by banks taking a more considered and risk-averse commercial approach.From a technology focus perspective, retail banks will demonstrate a preference to make technological enhancements that deliver tangible operational and financial improvements, and displaying a discernable degree of pragmatism when it comes to separating genuinely useful from gimmick.
Your key questions answered
Introduction
Predicting the medium-to-long term future is a delicate, yet surprisingly difficult, task. On the one hand, futurology positively encourages unbridled exuberance where retail banking is concerned. On the other hand, it's easy to play safe, and suggest that the sector will remain fundamentally unchanged a decade from now. Ovum’s view is that the most likely outcomes will lie somewhere in-between.
Features and benefits
- Gain insight into the trends that Ovum believes will shape the development of the retail banking industry over the next decade.
- Understand how retail banks will make pragmatic decisions to leverage technology in order to achieve key operational objectives.
From a market focus perspective, when compared to 2010, the environment that retail banks operate will not look vastly different in 2020, although macro-economic, regulatory, and commercial pressures will have varying degrees of influence.From a business focus perspective, with their wings severely clipped by governments, central banks and regulators following the industry crisis of 2008/09, the years between 2010 and 2020 will be characterized by banks taking a more considered and risk-averse commercial approach.From a technology focus perspective, retail banks will demonstrate a preference to make technological enhancements that deliver tangible operational and financial improvements, and displaying a discernable degree of pragmatism when it comes to separating genuinely useful from gimmick.
Your key questions answered
- Learn what the retail banking competitive landscape will resemble in 2020.
- Discover the technologies that retail banks will be reliant upon in order to serve an increasingly diverse customer base.
SUMMARY
Catalyst
Ovum view
Key messages
Achieving stability will require regulatory changes to retail banking
Changes will occur in the competitive landscape in the decade to 2020
Former emerging markets will be mainstays in the global economy
Banks will have to meet the needs of an increasingly diverse customer base
Successful banks will engage with their customers via all available channels
The payments arena will not change radically, but mobile is an established method
Business users will help to drive core system transformation activities
Near-field communications payment capabilities will be a standard component in devices
Tactility and interactivity will be part of the banking experience
Retail banks will operate in a hybrid cloud computing world
Core systems will evolve with changing operational requirements
MARKET CONTEXT: RETAIL BANKING IN 2020
Achieving stability will require regulatory changes to retail banking
Changes will occur in the competitive landscape in the decade to 2020
Non-traditional and new entrants will fail to gain significant market share
Specialist lenders and social networking sites will occupy a niche position in 2020
Former emerging markets will become mainstays in the global economy
The rise and rise of retail banking in China
Efforts will be made to meet the financial needs of the world's poorer citizens
BUSINESS FOCUS
Life outside the fast lane
The development of retail banking will be evolutionary, not revolutionary
Banks will have to meet the needs of a diverse customer base
Generation Y will ask searching questions of the retail banking industry
The financial needs of seniors, boomers, and Generation X must not be ignored
Well-run banks will engage with customers via all available channels
Social media will become a constituent part of retail banking
The growth of interaction via video
The payments arena will not change radically, but mobile has legitimacy
Cash will remain king, but cash management costs will also remain high
Banks will follow a twin-track approach with their ATMs
Reaping the benefits of mobile payments
Business users will help drive core system transformation
TECHNOLOGY FOCUS
A pragmatic appliance of science
Social CRM technologies will be an accepted part of retail banking
Near-field communications payment capabilities will be a standard component in devices
Tactility and interactivity will be prevalent in the banking experience
Retail banks will operate in a hybrid cloud computing world
Achieving the partial shift to the cloud
Core systems will evolve in line with operational requirements
OVUM'S CODA
Retail banks will need to learn lessons from history
APPENDIX
Further reading
Methodology
Author
Ovum Consulting
Disclaimer
Catalyst
Ovum view
Key messages
Achieving stability will require regulatory changes to retail banking
Changes will occur in the competitive landscape in the decade to 2020
Former emerging markets will be mainstays in the global economy
Banks will have to meet the needs of an increasingly diverse customer base
Successful banks will engage with their customers via all available channels
The payments arena will not change radically, but mobile is an established method
Business users will help to drive core system transformation activities
Near-field communications payment capabilities will be a standard component in devices
Tactility and interactivity will be part of the banking experience
Retail banks will operate in a hybrid cloud computing world
Core systems will evolve with changing operational requirements
MARKET CONTEXT: RETAIL BANKING IN 2020
Achieving stability will require regulatory changes to retail banking
Changes will occur in the competitive landscape in the decade to 2020
Non-traditional and new entrants will fail to gain significant market share
Specialist lenders and social networking sites will occupy a niche position in 2020
Former emerging markets will become mainstays in the global economy
The rise and rise of retail banking in China
Efforts will be made to meet the financial needs of the world's poorer citizens
BUSINESS FOCUS
Life outside the fast lane
The development of retail banking will be evolutionary, not revolutionary
Banks will have to meet the needs of a diverse customer base
Generation Y will ask searching questions of the retail banking industry
The financial needs of seniors, boomers, and Generation X must not be ignored
Well-run banks will engage with customers via all available channels
Social media will become a constituent part of retail banking
The growth of interaction via video
The payments arena will not change radically, but mobile has legitimacy
Cash will remain king, but cash management costs will also remain high
Banks will follow a twin-track approach with their ATMs
Reaping the benefits of mobile payments
Business users will help drive core system transformation
TECHNOLOGY FOCUS
A pragmatic appliance of science
Social CRM technologies will be an accepted part of retail banking
Near-field communications payment capabilities will be a standard component in devices
Tactility and interactivity will be prevalent in the banking experience
Retail banks will operate in a hybrid cloud computing world
Achieving the partial shift to the cloud
Core systems will evolve in line with operational requirements
OVUM'S CODA
Retail banks will need to learn lessons from history
APPENDIX
Further reading
Methodology
Author
Ovum Consulting
Disclaimer
TABLES
Table: Global GDP share: 2000–20
Table: Forecast growth in population demographics: 2010–20
Table: Global GDP share: 2000–20
Table: Forecast growth in population demographics: 2010–20
FIGURES
Figure: Savings as a percentage of GDP: 2005–11
Figure: Customer transaction and interaction mechanisms: 1970–2020
Figure: How important are the following channels to you in financial services?
Figure: Predominant social media platforms around the world
Figure: Age distribution of US and UK Facebook users
Figure: Key factors influencing the prominence of video in retail banking
Figure: Quantifying the benefits of video communication in retail banking
Figure: The components of a social CRM system
Figure: The user interface of Wells Fargo’s touchscreen ATM
Figure: Supporters of the Enterprise Cloud Buyers Council
Figure: Savings as a percentage of GDP: 2005–11
Figure: Customer transaction and interaction mechanisms: 1970–2020
Figure: How important are the following channels to you in financial services?
Figure: Predominant social media platforms around the world
Figure: Age distribution of US and UK Facebook users
Figure: Key factors influencing the prominence of video in retail banking
Figure: Quantifying the benefits of video communication in retail banking
Figure: The components of a social CRM system
Figure: The user interface of Wells Fargo’s touchscreen ATM
Figure: Supporters of the Enterprise Cloud Buyers Council
