The Top 10 retail banking trends and predictions for 2014 are compiled from more than 60 global financial services leaders including bankers, credit union executives, industry providers, financial publishers, editors and bloggers, advisors, analysts and fintech followers.
This years list includes a continuation of past trends to the introduction of new trends in delivery, payments, competition, operations, customer experience and marketing.
Global leaders in the financial services industry were asked for their thoughts around upcoming banking and credit union trends and predictions. More than 60 responses were detailed in the original Bank Marketing Strategy blog post. The emphasis of this compilation is mostly North America, but most of the trends are global thanks to responders from the U.K. and the Asia Pacific region.
Two trends that are not listed, but impact virtually every trend discussed, are the omnipresence of previous and upcoming regulations as well as the continued investment in new technologies to make this years trends a reality. Two trends that may prove important, but got less than expected mentions were the underbanked and alternative currencies like BitCoin. All of the contributors did concur that disruption will continue at an unprecedented pace and that the industry will look different this time next year.
Top 10 Retail Banking Trends and Predictions:
Drive-to-digital: No trend has impacted the financial services industry as much or as quickly as the drive-to-digital. In fact, according to two recent reports from Accenture, 35 percent of banks market share in North America could be in play by 2020 as traditional branch banking gives way to new digital players. The research also indicates that 15 to 25 percent of todays roughly 7,000 North American financial institutions could be gone as a result of consolidation before 2020.
Payment disruption: It is virtually impossible to keep track of the new players hoping to disrupt the payments marketplace. With so many steps and interactions in a normal P2P or retail payments process, there is no shortage of players trying to grab a piece of the payments pie.
Increased competition: In 2014, the trusted role of banks and credit unions as the collector of funds, provider of loans, processor of payments and advisor of financial relationships will continue to come under fire from non-traditional players including new financial organizations (neobanks), hardware providers, third party payment processors, and mobile app developers.
Branch optimization: Current branch-based distribution models are no longer sustainable and are unable to meet the rapidly evolving customer needs for real time access and simplicity in interactions.
Focus on customer 3.0: Customer 3.0 is digitally connected, highly informed and demands a highly personalized approach in their communications, their products and the service they receive. Instead of walking into a local branch office during banking hours, these customers purchase their banking services much like they purchase music, books or other products . . . online, 24/7.
Breaking down silos: In order to manage customer information more effectively, banks will begin to eliminate both human and insight silos by integrating data, systems and processes across different product lines.
Simplifying engagement: Consumers are searching out those products and companies that can simplify our lives. But its important to recognize that simplifying an interaction with customers does not mean that the underlying product or service is simple. Instead, the key is to rethink as opposed to append and look for ways to eliminate steps, paperwork and processes that overly complicate.
Improving contextual experiences: A new type of marketing will emerge in 2014 activity-based marketing or marketing within the context of an activity being performed by a customer or prospect. New platforms will emerge that improve the targeting of offers and social media channel insight will be used to improve service and delivery. Finally, banks will continue to improve real-time alerts and notifications that will strengthen loyalty and engagement.
Differentiating brands: The digitalization of the industry is further commoditizing our brands, with fewer face-to-face interactions limiting our ability to set banks apart. Banks and credit unions will begin to find ways to stand out in a crowded competitive marketplace in 2014, leveraging all channels to make their message heard.
Global innovation perspective: Banks and credit unions will begin to look beyond our shores for innovative ideas in 2014, learning from overseas organizations that in some cases are far ahead of our domestic offerings.
Jim Marous is an industry leading direct marketing strategist and senior vice president of corporate development for direct and digital marketing agency New Control. Jim is a frequent industry speaker and author of the Bank Marketing Strategy blog. He can also be followed on Twitter and LinkedIn. His abridged blog post on top retail banking trends for 2014 is reprinted with permission. It was originally posted on Bank Marketing Strategy blog Dec. 16, 2013. Here is the unabridged post.