Future-gazing in retail banking – the big trends for 2013

By Gopal Kutwaroo, senior director, NCR

The banking industry has always evolved with the times to embrace new challenges and consumer attitudes. Increasingly, technology is playing a key role in this evolution, fundamentally changing the way in which we bank. Indeed, over the past couple of decades the banking industry has witnessed major transformations which have included internet banking, contactless payments and self service solutions, bringing in a new era of customer and user expectation.

But what will these changing demands bring for banks in 2013?

The rise of mobile
One of the biggest challenges currently facing many banks is how to make their mobile solutions truly useful for their customer base. Mobile banking represents a new way of interacting with banking customers, maintaining loyalty and attracting new ones. It also creates a better experience for customers who are able to pay and transfer money between accounts whilst on the go.

According to industry analyst Juniper over one billion mobile phone users will use their devices for banking purposes by 2017, compared to 590 million this year. Therefore it’s integral that banks adopt the right mobile technology early on, as this trend will gather speed over the coming years. While there is no perfect solution to how this is done, and each bank will have its own approach to mobile, the most important thing for banks to remember is the need to offer customers the experience they want to use and adapt to their needs and changing demands. Nowadays it’s all about ‘C2B’ rather than ‘B2C’ where customers are driving the service they want, rather than the other way round. Trying to implement new technologies that do not fit with the way in which customers are already using their mobiles will have little chance of success.

Indeed, getting the mobile opportunity right will be crucial for UK banks in particular. It is expected that in September this year, the UK Payments Council will introduce measures enabling customers to switch banks more easily, increasing overall competition amongst the UK banking sector. With mobile banking becoming increasingly popular amongst consumers, it is likely to be a key battleground for the hearts and minds of existing and potential banking customers.

Branch transformation
It is clear that bank customers want and expect a physical presence in close proximity to where they work or live, but changing dynamics that include online and mobile banking are reducing traffic coming into the branch. This is making a financial institution’s branch strategy a challenging one and many banks are looking at their current infrastructure to improve customer experience and optimise costs through technology. Measures such as improving digital signage and increasing self-service will be key to adapting to changing consumer demands and keeping branch banking relevant.

It will also help banks keep their branch operations as cost-effective as possible.By adopting new technologies that can increase automation there is less requirement, for example, for tellers to be stuck behind a screen performing non-revenue generating work.Instead teller can become sellers, getting out onto the branch floor and speaking to customers about activities that will generate revenue for the bank such as loans or mortgages.

Multi-channel integration
While many banks have made great strides in extending their brands to mobile and online platforms, the next step is to integrate these consumer experiences so that banking customers can begin in one channel such as mobile and seamlessly move to other channels such as ATMs and online banking. For example technologies now exist that enable customers to book an appointment through the internet, a mobile device or a self-service terminal. This allows customers to view and select appointments in real-time providing more choice through different channels.Banks should not underestimate the importance of integrating these channels with their physical branches as customers still rate personal interaction as very important.

Retail banking has changed significantly in the past few years. Gone are the days where customers stood in long queues in a branch, waiting to make a transfer to another account. Customers are actively being enticed with new digital advancements such as phone apps, mobile wallets and online banking. With the proliferation of new channels for customers to bank, financial institutions will need to integrate these into existing infrastructure and focus more firmly on what customers want. The banks that become the earlier adopters of these new technologies will undoubtedly be best positioned to lead the industry forward.