When it comes to Retail banking in 2023, the areas of historic strength for legacy banks (payments, lending, small business), competition remains intense. Digital players continue to make advances despite a considerable reduction in available venture funding. The writing is clear on the wall: digital transformation initiatives must be continued but at a faster pace. Financial institutions must continue transitioning from a philosophy of iteration to one that embraces the disruption of conventional banking structures.
The number of new collaborations and alliances should expand, with a greater emphasis on the speed and scope of innovation – using data, advanced analytics, and contextual delivery of services. The focus of banks and FIs should also be on fostering financial wellness-related client interaction.
Partnering with domain experts in a retail banking technology solution, like Maveric Systems, offers banks and FIs mature advantages to their digital transformation strategy.
New Approaches for Customer Engagement for future Retail Banking Operations.
To thrive in the current digital environment, banks must rearticulate their value offer, keeping in mind the power of simultaneously streamlining and enhancing the client experience and creating value through data. To do this with consistent accuracy, a three-pronged approach is required.
- Using risk modeling, banks will be able to identify and anticipate potential problems earlier. Therefore, financial specialists might recommend solutions and workarounds to circumvent these hazards.
- Large swaths of data will aid internal regulators of financial institutions in monitoring transactions and detecting fraudulent behavior, preventing fraud.
- Client satisfaction – banks will be able to enhance the entire user experience across all platforms by utilizing tailored customer data.
Three Crucial Factors that influence Retail Banking Performance in 2023
- Utilizing data for enhanced customization and consumer engagement. Importantly, banks have significant advantages over Big Tech in terms of client engagement and data, but they have yet to capture their entire worth. To compete for data on an equal footing with technology companies, banks will require a comprehensive data infrastructure to support data collection, storage, and advanced analytics, as well as a digital marketing engine that translates analytical insights into personalized messages that anticipate the needs and intentions of individual customers.
- A cutting-edge technology stack designed to decrease expenses and accelerate innovation. Each primary retail banking business model requires an IT infrastructure that can accommodate considerable fluctuations in demand for streaming and processing capacity and rapidly supply new solutions. The most challenging aspect of designing the new architecture is determining which components should be developed in-house to enhance competitive differentiation and which infrastructure elements can and should be outsourced to reduce costs and the risk of service interruptions caused by updates and upgrades.
- A flexible operational model to adapt to rapidly changing markets. The most successful banks will develop speed as a core competitive advantage, and they will do so through two primary channels: an agile operating model and the development of the appropriate people and skill mix.
While much has been made of the threat posed by Fintechs and Big Tech, incumbent banks will continue to dominate the retail banking market. Reshaping profit pools in specific businesses of the universal banking model—daily banking (deposit accounts, payments, and credit cards), navigating life events (with complex lending products), or building and protecting wealth—where the bank can define and deliver a value proposition that can win in our new digital age is the most direct route to success. The new victors will function like technology businesses, with advanced data capabilities, a cutting-edge technology stack, and flexible operating procedures.
About Maveric Systems
Starting in 2000, Maveric Systems is a niche, domain-led Banking Tech specialist partnering with global banks to solve business challenges through emerging technology. 3000+ tech experts use proven frameworks to empower our customers to navigate a rapidly changing environment, enabling sharper definitions of their goals and measures to achieve them.
Across retail, corporate & wealth management, Maveric accelerates digital transformation through native banking domain expertise, a customer-intimacy-led delivery model, and a vibrant leadership supported by a culture of ownership.
With centers of excellence for Data, Digital, Core Banking, and Quality Engineering, Maveric teams work in 15 countries with regional delivery capabilities in Bangalore, Chennai, Dubai, London, Poland, Riyadh, and Singapore.