In Focus Collections


2020 vision


The banking industry will see a continued period of change over the coming years


Yemi Olagbaiye Head of client services, Softwire


The banking market is starting to reach the same type of tipping point we saw in the music industry, where the digital channels are putting pressure on revenues and triggering a redefinition of service. Transition times to new platforms, or new


technologies, generally takes a few years and the aftermath requires experienced attention, but to keep competing in the financial space, organisations need to look ahead and take action now.


Physical branches Physical branches have a high fixed cost, and banks are recognising that, unless they find a way to be more productive, they will need to find a way of significantly reducing this. In fact, as hard as it may be to believe, by


2020 it is likely that traditional branches will be obsolete. Instead, consumers may find their ‘branches’ co-existing in coffee shops, or only in a flagship format. In order to adapt to this and combat their


lack of physical presence, banks will have to focus on their digital customer experience. The only way to compete in a market will be to offer a seamless integration of sales and services, with banks organising themselves around customers, rather than products or channels. Many of the larger banks will be well on


their way to a seamless integrated channel experience, as they cannot afford not to. On the flip side, smaller banks will struggle and will either have to partner with third-party sources, or get swallowed up through mergers and acquisitions. Cash usage amongst consumers is already


dropping and some digital transactions are considered the norm in the banking sector,


April 2018 We will also see chatbot and AI-driven


Overall, the year 2020 will see banking as a platform increase, this does not mean giving away the customer experience to fintech startups and tech giants


however the future will see every aspect of banking being available through various mobile devices. Mobile payments will completely displace


real wallets, whilst further innovation will take place for micro-payments – taking cash fully out of the equation. Customers will have one, or many,


financial partners and, through mobile, they will have access to all their relevant financial information in real-time to help them make the right financial decisions in their day-to-day activities.


Bank interactions Blockchain, the internet of things, and wearables will also be driving bank interactions, but with this comes cyber- security concerns. Banks will need to tread cautiously, with security taking a centre stage in banking-platform development. Cyber security will be key to trust and the


expectations towards security of information and privacy will be even higher. As the opportunities for banks to interact


with customers face-to-face diminishes in 2020, smartphones will dominate service delivery and interaction.


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conversations become commonplace, so helping to speed up the on-boarding process, and robo-advice will be a standard practice to reduce the likelihood of human error.


Skills gap Increasing the use of technologies such as these, however, does mean that the opportunities for human employees are downscaled. This will result in the talent pool eroding


due to diminishing levels of compensation and people starting to look at other more attractive opportunities outside of banking. This will leave an internal skills gap,


resulting in banks needing to ensure they collaborate more with software companies to provide a maintained higher-grade talent pool to combat the transition challenges, and lead the reformation of these companies.


Disruption phase Aside from the banks, fintech is also set to go through its own disruption phase, as smaller providers fold and larger providers either partner with banks or are swallowed up by them. This will be due to funding drying up,


regulations increasing, or there just being greater synergies to capitalise on between fintech companies and innovative banks. Overall, the year 2020 will see banking


as a platform increase, this does not mean giving away the customer experience to fintech startups and tech giants, but instead enhancing the customer experience by tying in finances to services and systems already used. CCR


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