New Year’s Revolutions – The Banking View in 2013

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!


    Mirek Cervenka says:

    Very interesting view on banking key issues. I agree clients are the key focus of the banks and it will remain also for the future. As clients are more and more using remote technologies (whether mobile or static at home/office), their proper integration seems to me to be one of the key challenges for the banks. By integration I do not mean “only” technical one, but mainly integration of information about clients. At all channels, the bank and client should see the same information, including history of contacts with the client. This gives increasing importance to proper data management and integration.

    I have one comment to core systems – a decision whether to replace existing core system is not about money only. Replacement of core system has a huge impact on the whole organization, it freezes the banking business for two or three years. And let’s be honest, the result of such a monster project is pretty unsure.

    In cases the core system is not completely broken, I would rather stabilise the core system for transactions processing and develop a proper integration layer around it in order to be able to connect all client channels and other internal system areas. This brings faster result, it is significantly cheaper and mainly it does not disturb the daily operations in such a big extent as core system implementation. It also gives an open platform for integration of new technologies, whether used by clients, bank partners or internaly within the bank.

    I welcome any comments

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