Pandemic has accelerated innovation in retail banking, report says
Infosys Finacle, part of EdgeVerve Systems, a wholly-owned subsidiary of Infosys and the European Financial Management & Marketing Association (EFMA), today unveiled the 13th edition of the annual “Innovation in Retail Banking” report , written by Jim Marous, editor of the Digital Banking Report and co-editor of The Financial Brand. Senior executives from more than 1,165 banks and financial services companies around the world participated in the study.
Key findings from the report indicate that 14% of those surveyed – up from 7% last year – said their organization’s digital transformation had spread and worked as intended. Sixty-four percent of those polled believe the pandemic has made them much better at innovation. Overall, more than half of respondents continue to rate their organization’s digital transformation efforts as insufficient, as in last year’s report. Fifty-seven percent of those surveyed said their digital rollout was partial or that digital investments were not working as intended.
One area that saw an acceleration in innovation during the pandemic was digital delivery – from onboarding to service and engagement. Lockdowns and social distancing have forced banks to expand remote customer service in unprecedented ways. Forty-four percent of those polled said they had increased their investments in digital broadcasting by more than 10 percent. Respondents expected increased investments in customer experience and channels, which are key elements of digital delivery, in 2021 and beyond.
Other highlights included digital delivery, payments and cards, and lending services were major areas where investment in innovation had increased. Advanced data and analytics, open APIs, and cloud computing were considered the most important technologies with the greatest impact on banking services over the next 12 months. Cloud computing is considered to be an area of ââgreat importance for the future. Interviewees indicated that large tech companies have significant advantages over traditional financial institutions in terms of data and analytics capabilities, as well as the skills and talent of the teams.
Respondents believe that non-traditional competition will lead to innovation in several areas. Fintech startups will lead innovation in digital delivery and lending services, leading consumer tech companies such as Apple, Google will lead innovation in payments and cards, and challenger banks will lead innovation in current accounts / checks.
Sanat Rao, Chief Business Officer & Global Head, Infosys Finacle, said: âAt a time when the banking industry was already struggling to generate profitable growth, the pandemic has tested their resilience and agility. The challenges of the pandemic have accelerated digital transformation programs in banks around the world and, as a result, banking innovation as well. Unsurprisingly, digital delivery saw one of the highest shares, and this trend is also expected to continue in 2022. Another important element in the results was greater acceptance among bankers of the dramatic changes that are disrupting their business, as well as the need for a sustainable and holistic business model innovation to remain relevant.
John Berry, CEO of Efma, said: âThis year has once again proven that the financial services industry continues to move towards digital banking transformation. Even the most innovative players now face stiff competition from big tech companies and of course fintechs. It is essential that they must continually innovate in order to stand out from the competition. Customer engagement is always at the center of future success.
Jim Marous, Owner and CEO of the Digital Banking Report, said: âThis year’s Innovation in Retail Banking report shares progress in the digital transformation of financial institutions in the 18 months since the pandemic disrupted the market. banking sector. Beyond crisis management caused by a pandemic, financial institutions of all sizes have made significant progress in reimagining the purpose and structure of innovation within the bank and integrating data, analytics, modern technologies and process automation to deliver an enhanced customer experience. The research findings shared in this year’s Innovation in Retail Banking report provide a guide for strategic planning and investment prioritization for banks and credit unions around the world.