By : Colin Gordon
February 17, 2020 08:00 AM
What key trends will the retail banking sector see in 2020 and beyond? Here are five to be aware of.
As we head into a new decade, now seems like an ideal chance for banks and credit unions to set their priorities that will define not only the year ahead, but their direction for many years to come.
Such decisions are coming at an opportune time, as the retail banking sector is in the middle of one of the biggest transformations in technology and consumer attitudes for years, if not decades. But where there are challenges, there are also opportunities, and if financial institutions can transform their digital operations and offer the services today's customers want using physical channels as well, they stand well-placed for success.
With this in mind, here are five of the top trends for the rest of 2020 and beyond that financial institutions should prioritize: branch transformation, sustainability, security, technological innovation and service excellence.
#1. Reimagining the branch
The future of the branch has been a much-discussed topic in recent years, especially with the push towards self-service and a new generation of multifunction ATMs. But while there will still be a place for the branch for many years to come, competition from digital-only alternatives will require a rethinking of the traditional branch.
While features from free Wi-Fi to in-branch coffee shops are being used to entice customers through the doors, the real transformation will come from tools like self-service and video banking. These technologies will enable banks to offer a wider range of services in a smaller physical space, while also freeing up in-branch staff from day-to-day interactions to focus on more value-adding activities, such as one-on-one financial advice sessions.
#2. The rise of ATM as a Service
The concept of 'Anything as a Service' has become popular in the tech world, and innovative banks are looking at how it can be applied to their own operations. While behind-the-scenes tools like cloud computing are increasingly on financial institutions radars, the ATM is another area where this concept is set to prove useful.
ATM as a Service involves offering a complete ATM solution that includes software, hardware, maintenance and managed services for a single monthly cost. As it's an operational expense, it's a great solution for banks and credit unions that want to upgrade their networks to the latest equipment without significant capital outlay.
While this is not a new concept, as financial institutions increasingly recognize the importance of advanced ATM functionality, this approach will gain popularity as an easy and affordable way to offer customers the services they expect.
#3. Putting sustainability first
The issue of corporate social responsibility has become a major consideration for many industries in recent years, and consumer banking is no different. Today's consumers expect every company they do business with to consider sustainability.
For the banking sector, this will include greater pushes towards paperless banking, the use of sustainable materials and suppliers, and tools like video banking that reduce the need for customers or representatives to travel. The savings that can be realized from the operational and energy efficiency of modern self-service technology can also help banks and credit unions on the road to a more sustainable future.
#4. Boosting security
As is the case with many parts of today's digital-first economy, security will also be a major focus for retail banks in 2020. One recent survey by Clearswift revealed that in the UK, for instance, 70 percent of financial firms reported security incidents in the last year, while research from Lloyds suggests cyber security is emerging as a top investment priority for retail banks.
Improving anti-fraud efforts will be a key part of this. From real-time monitoring of transactions, to contactless ATMs that can prevent skimming attacks, banks and credit unions will have to invest in anti-fraud solutions to reassure customers their finances are secure.
#5. Making innovation a priority
Overall, financial institutions will need to start the new decade on the right foot by making innovation a central theme of everything they do. With fintech alternatives and challenger banks presenting compelling options to customers, younger consumers in particular are more comfortable switching their services to digital-first platforms.