Top Trends in Retail Banking: Asia, Europe, and North America

by Bart Narter, January 24, 2011
Industry Trends
Asia-Pacific, EMEA, North America

Abstract

Every year Celent gathers its analysts across the globe to summarize the top trends in banking for the major geographies: Asia, Europe, and North America. We synthesize key trends in each geography, gleaned from bankers and vendors, clients and nonclients, and regulators and central bankers. We see banks now making offensive, rather than defensive, moves looking for ways to grow their business.

The practice of banking became fundamentally more difficult during and after the global financial crisis of 2009. Banks in all geographies experienced the fallout of a challenging economy that has only begun to improve. Banks are also subjected to increased public and regulatory scrutiny as a result of the recent near-collapse of the financial system. In last year’s report, Celent found a triumvirate of global priorities:

  • Managing risk
  • Reducing costs
  • Improving multichannel delivery

In a new report, Top Trends in Retail Banking 2011, Celent’s crystal ball shows many banks moving forward again. Asia did not suffer as badly as other regions during the crisis, and momentum there only strengthens.

  • Multichannel remains on the top three list from mobile cash management to user experience in Internet banking.
  • Payments are moving to the fore. Cash management is a fee-generating business that has withstood the crisis. Banks are investing heavily across the globe in this area.
  • Between channel proliferation, customer profitability, and risk, many are finding that they need to take an enterprise view of architecture and have enterprise needs take a more important place in IT. Whether the discussion is around payment services hubs (PSH), enterprise service buses (ESB), service-oriented architecture (SOA), or enterprise data warehouses (EDW), bankers are thinking about their business more holistically.

“While there are many initiatives in retail banking across the globe, some themes recur. Mobile is hot across all regions, though in different ways. With the proliferation of nontraditional channels, bankers are starting to think about multichannel projects.” stated Bart Narter, author of the report and Senior Vice President of the Banking Group at Celent. “They are also investing in channels such as remote deposit capture from a home scanner or a mobile device, mobile banking from SMS, web or app, and richer Internet Retail banking experiences to link customers closer to the bank.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Tylor Tourville
ttourville@celent.com
Tel.: +1 617 424 3284

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

3

Global Trends

5

 

Payment Services Hubs: Getting Closer to the Vision

5

 

Increased Competition Among Card Schemes

6

 

The New Shape of "Alternative" Payment Methods

8

 

Base 2.5 and Basel III: The Next Wave

10

 

Making IT Slimmer and Smarter

12

 

Data and Analytics Help Create the Path Toward Intelligence. Enter PFM.

13

 

Banks Still Don’t Get Social Media

14

 

Nonbanks Team with Banks to Offer Innovative Services Online

15

Asian Trends

17

 

Mobile Contactless Payments Becoming a Reality

18

 

Social Media Emerging as a Marketing Tool

18

 

Regional Banks Continuing International Expansion Initiatives

18

 

Foreign Banks Expanding to Emerging Asian Markets

18

 

Rural Banking Takes Root

19

 

Recovery in the Wealth Management Market

19

 

Smaller Banks Turn to Outsourcing and BPO

19

 

Smartphones Have Banking Services

19

 

Mobile Contactless Payments Coming to the Real World

21

European Trends

23

 

Deliver Mobile Banking Services

23

 

Enhance Branch Distribution Capabilities

23

 

Upgrading Risk Management and Stress Testing Systems

24

 

Expanding into European Markets

24

 

Cost Reduction

24

North American Trends

25

 

Changing Economics of Debit Cards

25

 

Small Business Online Banking = Confusion

27

 

Mobile Banking Enjoys Steady Growth; Players Are Maturing

28

 

Real Acceleration Toward Mobile Contactless Payments

30

 

Remote Deposit Capture Goes Mainstream

31

 

Branch Banking Becoming an Alternative Channel

33

 

A Second Wind for Branch Transaction Automation

35

 

Banks Are Being Forced to Think About Customer Profitability

38

Conclusion

40

Leveraging Celent’s Expertise

31

 

Support for Financial Institutions

41

 

Support for Vendors

41

Related Celent Research

42

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