While many still think the banking sector is characterised by legacy systems and lack of innovation, this could not be further from the truth. 2018 marks the year when a multitude of external factors will shake up the industry once and for all and reinvent the way people bank. Inevitably, this presents a threat, but also an opportunity.
Today consumers expect a modernised banking experience, one which is complemented by online and mobile banking. At the same time, the number of security breaches last year pushed cyber safety to the top of the priority list, bringing technology to the forefront for both banking leaders and customers alike.
As well as this, the introduction of the second Payment Services Directive (PSD2) and Open Banking will be decisive in shaping the future of the banking sector. But how will opening up the industry to third parties and the latest technology solutions impact the industry? To answer this, Fujitsu surveyed 2,000 members of the public and 647 business leaders across industries. The result is the recent Technology in a Transforming Britain Report, which found that half of financial sector leaders believe banks will not exist in their current form in a decade.
The question is: What can we expect from the banks of the future?
Here are three areas I expect significant change in when it comes to banks, and how the industry will react:
- Delivering fast, personalised services: With so many third parties joining the financial sector, I expect an increase in competition to push banks up their game when it comes to customer service. When asked what they would like to see implemented to improve their experience in banking over the coming year, consumers chose artificial intelligence (13%), biometrics (15%) and 5G mobile networks (10%). All three have the potential to help banks provide more intuitive, efficient solutions and faster, more secure services.
- Improved productivity that will see a boost in adoption rates: The fast moving world of technological advancements spares no one. In Fujitsu’s survey, financial leaders attributed three key internal benefits to tech: improving employee productivity (47%), operational efficiency (38%) and fuelling business growth (37%). The next step therefore is modernising processes to increase workplace efficiency, which will ultimately allow banks to be more agile, and keep up with what customers want.
- The big four: design-led thinking, internet of things, artificial intelligence and 5G: I’m increasingly seeing banks turn towards intelligent automation to help with day to day tasks. In fact, over a third (38%) have implemented Internet of Things in the last twelve months; while two-in-five (42%) plan to implement artificial intelligence in the next year. These new capabilities facilitate work and collaboration across teams, which is perhaps why seven-in-10 financial sector leaders believe technology will enable them to overcome many of external issues – and gain a competitive edge.
It’s clear that technology will not make banks redundant. Instead, we will see significant changes in the industry which will make financial institutions be more customer-centric and efficient, and provide more targeted, secure and intelligent solutions. With technology as the driving force, both UK banks and its customers have plenty to look forward to!