A glimpse into the future of banking
What could banks look like in five years
Today’s banks are at the beginning of the biggest change in their history. The rise of P2P, artificial intelligence and blockchain means they will already begin to look different in five years’ time.
Tomorrow’s banks will be focused on their customers’ journeys, integrating seamlessly between the branch and the digital services, with virtual assistants and robot-advisors blending human and virtual interactions. They will be more automated, adapting offerings to each customer’s specific requirements. Payment automation will be available for smart objects such as cars, fridges and homes.
Banks will also need to use their intimate knowledge of consumers to place them at the heart of exchange ecosystems, providing new personalized services based on aggregated profiling and peer benchmarking. Using this knowledge, they may become service brokers in a wide range of domains.
According to us, in five years, ecosystems will have evolved significantly with new entrants and many mergers and acquisitions. Banks need to begin preparing for these massive challenges today.
Which driving forces will help them succeed
Customers no longer stay with one bank for life. Moreover, competition is now intense, with FinTechs offering low-cost services. Digital platforms such as Alipay are taking more transactions than ever from traditional card businesses. PSD2 could lead to a European shockwave equal to that seen following the energy market deregulation.
To succeed, banks are fundamentally reinventing themselves as customer-centric, data-driven business platforms. This makes business ecosystems evolve dramatically with data being the key asset.
In this context, banks have an opportunity to become the hub for customer financial and payment data in addition to their core business. This opportunity will most likely see them partner as well as compete with the FinTechs and technology giants.
We are convinced that open banking is the beginning of a very strategic transformation: the shift to a ‘platform of services’ model. This shift may lead to banks becoming data aggregators and service brokers within an ecosystem of diverse partners. We believe pushing relevant offerings identified through advanced analyses is the start of the road toward banks monetizing their data, which has the potential to open up very sizeable new revenue streams.
What should banks do today
The banks we work with know they need to adapt rapidly or risk being left behind. Even those considered too big to fail today feel threatened and are very active in transforming with us.
Banks also need to work with partners and become platforms for FinTechs. After all, FinTechs can be tremendous accelerators for innovation and launching new banking services.
To succeed in the digital era, we think it is vital to combine the traditional scalability and compliance of banks with the agility of FinTechs in a fully secure and data-centric way.
Look Out 2020+ for Banking
This blog is part of the Atos Look Out 2020+ Global Banking ‘Toward next-generation financial services ecosystems’ where we explore the business opportunities and key technologies which will shape the future of Banking.