Retail Banking Research Outlook 2020

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Banking During an Exogenous Shock

COVID-19 has delivered a sudden and pervasive shock felt across every aspect of our personal and professional lives. In financial services, we used to say that there were very few changes that looked like hockey sticks; that observation is now out the window. The Coronavirus will accelerate trends that had been simmering, rapidly bringing them to a boil and demanding strategic responses in months, rather than the years firms used to have.

Celent is committed to helping our clients assess the technology implications across the financial system, from changes in customer behavior to new strategies and technologies required to respond to this upended world. We’re in touch with financial institutions and their technology partners around the world and are developing a host of new perspectives, updated regularly, to help you make the right strategic technology choices in the medium- and longer term. Our clients have access to our insights through traditional ways – reports, blogs, Analyst Access – and new media, like interactive virtual roundtables and snap polls.

Because Celent is part of a larger organization, Oliver Wyman and Marsh & McClennan Companies (MMC), you have access to our collective thought leadership in areas ranging from epidemiology (Oliver Wyman), to economic modelling (Oliver Wyman), to risk/ crisis management (Marsh), and human resource implications (Mercer).

For further information, please see:
Marsh https://www.marsh.com/us/insights/research/pandemic-risk-hub.html
Mercer https://www.mercer.com/our-thinking/managing-novel-coronavirus.html
Oliver Wyman https://www.oliverwyman.com/our-expertise/hubs/coronavirus.html
MMC https://www.mmc.com/pages/coronavirus.html

One thing is certain: none of us can go it alone. As you face hard decisions in the areas of technology and partnerships, Celent is here to support you. We can help you vet partners and technologies as you respond to government initiatives, the changing needs of your customers, and growing cost pressures.

RECAP: THREE EXTERNAL FORCES DRIVING BANKING CHANGE

At the start of 2020, retail bankers faced a landscape shaped by three powerful external forces.

retail banking

Banks and credit unions continue to see new competitors try to pick off pieces of their business. From BigTech (Amazon, Google, Facebook, et. al.) to neo- and digital-only banks, incumbents are facing competitive pressures from rivals trying to change the rules of the game. And smaller institutions, those who’ve typically only had to worry about local and regional financial competition, now have to contend with Tier I banks entering their markets with brand and very good digital offerings.

Those digital offerings, funded by tens of millions of dollars of investment, have begun to appeal to customers who have been exposed to cutting edge experiences. The expectations that Uber, Amazon, Instagram, and Apple have all helped to shape trickle over into banking interactions. Fairly or not, people want their banking experiences to be contextual, engaging, and fast (regulations be damned!). Many banks now have at least serviceable digital offerings; the challenge is fortifying the middle- and back-offices to support them.

Even before COVID-19, banking executives uncertain about the economic environment have begun to act more cautiously. Speculative investments that may have been justified by the need to digitize or innovate are being scrutinized more closely, while recent events demanded rapid reaction and reprioritisation of initiatives.

These forces imply a set of specific technology priorities that banks should embrace. We’re going to focus our research efforts on helping bankers (from line of business executives to technologists, strategists to implementers) educate themselves about key technological questions, prioritize their spending, and execute their strategies.

2020 RESEARCH THEMES: UPDATED

COVID-19

Celent is committed to helping its clients assess the technology implications across the financial system as a result of COVID-19. We’ll address the top trends in Retail Banking through the lens of COVID-19. We are also working on a framework to help bankers assess key areas and timeline of impact under different scenarios.

Cloud

Entering adolescence, cloud implementations are becoming increasingly common. With experience, banks are uncovering unexpected sources of value and discovering new drawbacks that they’ll need to be wary of. One thing is clear though – cloud is here to stay, and we are looking to help our clients develop robust cloud strategies.

Artificial Intelligence

The promise of AI is coming into focus, and some of the more outlandish claims have been tempered. As it begins to enter its prime, we’ll explore AI’s adoption, use cases, and vendors.

Data

A huge topic, data is the greatest untapped source of value for banks. From strategy to tactics, we’ll explore the role and adoption of APIs in facilitating data flow, the part that external partners can play in monetizing data, and the pitfalls that banks should consider.

Payments

Payments have been changing rapidly even before the pandemic. Recent events demonstrated that while payment infrastructures so far proved to be resilient, they will continue to be tested by the changing mix of payments, lower volumes, and competitive solutions.

Model Bank Awards

With nearly 140 nominations of exceptionally high quality, we have been developing case studies of the winners, culminating in the mid-April publication of roughly two dozen reports from around the globe.

TYPES OF INSIGHTS

We will continue to deliver different types of insights, from analysis of technology trends shaping the banking industry to vendor analysis. Note that we’ll be publishing Briefing Notes (a new short format based on interesting updates we receive from industry players) throughout the year, but there’s no way to predict what those topics will be.

Industry Trends and Case Studies

  • Model Bank case studies from around the world
  • IT spending
  • Cloud, AI, Data and APIs
  • Cards and Payments
  • Consumer lending, including mortgages

Polls, Panels, and Primers

  • Cloud adoption and lessons
  • AI use cases (including RPA)
  • Development methodologies, e.g. Agile and their ripple effects
  • Consumer attitudes toward banking technology

Vendor Analysis: ABCD, Spectrum, Landscape Reports, Briefing Notes

  • Digital Platforms
  • Core (traditional and cloud)
  • Loan Collection Systems
  • Channel Systems
  • Various Briefing Notes

VendorMatch, Celent’s new vendor discovery tool, is playing an increasingly important role in our vendor analysis. See more at https://www.celent.com/vendormatch.

Contact us for more information about what we have planned in Q2.

If you are a client, please sign in to access a full view of our Q2 2020 agenda.