As 2013 begins, this is a good time to look at some of the key issues for banks and their customers in the year to come.
At SAP Banking View, we have identified some of the elements we believe will have the greatest impact on banking in 2013. We will look at each of these in more detail in the weeks to come.
Finding, understanding and keeping customers
The customer remains key – and banks are facing greater competition for their attention. Not only are other banks in the frame, but also organisations outside traditional banking are targeting higher-value financial transactions with specialised services.
Banks will need to be able to analyse and anticipate customers’ needs, tempt them with the right offers and services and reward their loyalty.
Navigating the digital world
The generation beginning their banking life in 2013 may never visit a physical branch – and others will mix physical, mobile and online channels. Providing multichannel service is only part of the journey, however. Channels need to be integrated to provide banks with a coherent picture of customers.
Mobile technology will change the way banks work internally, as well as externally. In both cases accessibility and security will be vital.
Meeting the need for transformation
On average, banking is still spending 6.5% of its revenues on IT – in a world of shrinking margins and increasing competition, this is unsustainable. Transformation of core banking technologies is a major step, and many banks are exercising caution. However, ultimately core transformation will not only reduce maintenance and management costs, but also open up new possibilities and break down harmful internal silos.
Managing regulation and compliance
As the global financial crisis and its aftermath continues to cause instability and uncertainty, banking regulation is increasing in complexity and rigour. Furthermore, national applications of regulatory principles are often complicated by local politics and priorities.
Banks need an approach that is able to comply with global regulations – and demonstrate compliance with a comprehensive audit trail – but is also flexible enough to adapt to national implementations. Compliance is challenging – but the risks and penalties of non-compliance demand a focused response. And adaptable systems and insight into business practices that inform flexibility can deliver competitive advantage beyond simply avoiding punishment.
Facing the future
The bank of the future will need to address these issues – but it will also need to respond quickly and effectively to a host of challenges.
Where do you see the greatest challenges of 2013 for banking – and the greatest opportunities?
Share your thoughts by adding a comment to this post – and look out for further posts in this series!