I recently had the pleasure of attending and speaking at Zafin’s Banking Leadership Summit for North America – Banking Reimagined. It was an informational and enjoyable event, with insights and perspectives from banking and technology vendor executives.

Here at Celent we conduct annual market intelligence surveys of banks around the world. Each year, we hear that more than 50% of banks feel that it is harder to win and retain clients than in the previous year. So – just like inflation, that has a compounding effect. In response, banks are also spending significantly in digital channels and experiences – that’s important – but it is only the window to the bank, albeit an important one. How else can banks drive future growth?

A major theme of the event was a focus on building customer trust and loyalty. Digital channels can help with this if the experience is excellent, but it is not enough. Loyalty comes from delivering a consistently excellent end-to-end banking experience cross the whole sphere of banking operations. Transactional excellence sets the bar, but beyond that banks can better interpret customer needs and engage customers with more advanced customer intelligence. This requires a deep understanding of the customer’s personal or corporate goals and priorities, banking activity, transaction history, products entitled versus used, life/company growth stage etc. That takes a deeper analysis of data – including the use of AI. However, better customer intelligence isn’t enough – it must be actionable at the right time, frequency, and through the right channel.

We are at a critical juncture for banks and banking. It would be easy to say AI is the greatest opportunity to help banks grow in the next 5 years, but it is more complicated than that. Many banks are still focused on the transactional aspect of banking. That’s important, but this is also an information economy – and banking is one of the most data intensive industries there is. Many banks have grand AI ambitions (Celent Dimensions data shows that over 50% of banks see AI as their top technology priority), but many have underinvested in their data estates. As a result – many are not (or will not) see the benefits of AI (in all its forms) and more intelligent products and services for some time. Clearly, the impacts of the right (or wrong) technology choices are greater than ever, and the performance gap between bank technology leaders and laggards is going to grow.

So, what can banks do about that? A major theme of my presentation was about achieving greater speed and agility – something I’ve written about before in The Need for Speed! Accelerating Product Agility in Corporate Banking. This doesn’t just apply to innovation of DevOps, but in financial agility through new pricing and revenue models, in product transformation, and in choosing the right technology building blocks to enable this.