Intellias has released an exclusive whitepaper titled “Preparing for the new growth cycle: a technical blueprint for banks” that provides an outlook for the retail banking industry from 2021 through 2025 and highlights the technical imperatives for banking leaders to prioritize in the short-term perspective.
Intellias research focuses on the three major drivers that will determine the shape of the banking industry recovery: consumer sentiment and shifting behaviors, competitive pressure from FinTech and digital-first banks, and economic and regulatory uncertainty.
The whitepaper discusses how the global pandemic accelerated existing digitization trends and led to a cohort of new behaviors that are poised to stay for the long term:
- Online and mobile banking is the preferred means of interaction
- Contactless and digital payments will remain prioritized post-pandemic
- Mobile onboarding, self-service support, and personalized advisory services are in high demand among younger consumer demographics
Despite this, most banking leaders are grappling to determine if they have the available IT infrastructure to differentiate themselves and excel over the competition.
The whitepaper also covers changes in the competitive landscape. Mature digital banks and FinTechs present a sizable threat to traditional players. Already, over 20% of retail banking and payment profits are poised to migrate from traditional players to digital competitors. What’s more important is that the profit erosion by digital players is taking place in the most profitable product segments — wealth management, remittances, and lending, among others.
In addition to the above, regulators are imposing extra demands in terms of data and infrastructure security. A fast and effective response to new compliance demands will also separate leaders from laggards.
To prepare and capitalize on the above changes, Intellias has developed a three-step approach to technical transformation that banking leaders should prioritize. The framework covers:
- Approaches to detangling conflicting business priorities and technical infrastructure requirements for enabling them
- A sustainable, paced approach to dealing with technical debt and pursuing legacy system modernization
- New approaches to IT operations management, required to attain digital excellence (DevOps, SecOps, data governance)
Retail banking leaders may be tempted to put off taking action due to the lingering economic uncertainty and the tempered prognosis for the banking sector’s recovery. Banking systems in the US, the UK, France, Germany, and Spain are unlikely to recover until 2023. However, this gives banks headroom for advancing technical initiatives and entering the new growth cycle with a far better digital posture.
About Intellias
Intellias is a trusted technology partner to financial services providers, offering a spectrum of consultancy, engineering, operations, and technology services. Over the past 19 years, Intellias has helped banking and FinTech leaders in Germany, the Netherlands, the US, and the UK deploy innovative customer-facing solutions and modernize their technical infrastructure.
