Banking for Tomorrow: Top Articles on NextGen Banking
What are the hottest trends that the banking world should keep an eye on in the years to come?
Given that half of the world is connected to the internet, and a powerful generation of future consumers is emerging, there’s no doubt that retail banking is going digital. Who are the industry’s digital champions these days? Where do they come from and what are they doing to better serve their customers?
Last but not least, what are the hottest trends that the banking world should keep an eye on in the years to come? We have done the research for you and compiled this selection of articles we think are worth reading.
Date: January 2021
The pandemic has accelerated the need for digitalization. What can we expect in 2021? First of all, 2021 “will be remembered as the year we picked ourselves up after COVID-19, hopefully learning something in the process”, according to Alan McIntyre, head of global banking at Accenture. He also presents the 10 trends most likely to affect banking over the next 12 months. Here are the top three:
- GO BIG AND STAY HOME: The “winner takes all” phenomenon is now emerging in retail banking.
- THE NEO-NORMAL: The best traditional banks and neobanks will win customers, while weaker incumbents and undifferentiated challengers will struggle.
- TWILIGHT OF THE BANKING APPS: As banking completes its migration from street corners to screens, competition in retail and commercial will heat up—and squeeze out standalone apps.
Author: McKinsey & Company
Date: January 2021
This article talks about the Asian region’s regulators increasing license allocations that set standards for the next wave of digital banks, hence “the opportunities for both incumbents and new entrants to enter the arena”. Three take-aways:
- LEADING IN SCALING DIGITAL PAYMENTS: More than 40 of the world’s 100 largest banks by assets come from Asia and account for approximately 50 percent of the market capitalization of the global top 100. “Asia’s best-known fintech innovators, including Alipay and WeChat Pay, lead the world in scaling digital payments”, says McKinsey & Company.
Asia’s digital licensing process began with Chinese regulators in 2015, and has since expanded around the region. Central banks in South Korea, Taiwan China, and Hong Kong SAR China granted a limited number of licenses.
- PARTNERING WITH FINTECH STARTUPS: Across Asia, incumbent banks are partnering with fintech start-ups to promote digital payments. In Thailand, Kasikornbank and Grab have teamed up to launch GrabPay by KBank, a mobile wallet.
Chat Luangarpa, executive vice president at KBank was a speaker at FintechOS Annual Summit’s debate on SME Banking in November 2020. He revealed KBank’s strategy towards SME banking, a banking segment severely hit last year. FintechOS wrote about KBank’s story and its initiatives amid COVID-19’s crisis in a recent article that we also recommend reading.
- THE PATH TO SUCCESS: “Not every Asian digital bank is a success story” notes McKinsey. But who has thrived? Those that have developed a productive business model and scaled effectively. “Once established, digital banks can generate higher revenues at a lower cost to serve than incumbents, putting them in a position to expand market share. In addition, their digital architecture enables them to access ecosystems of businesses and customers, bringing exponential benefits in terms of knowledge and data”.
Author: Alex Kreger, Financial UX Strategist/Founder of UX Design Agency, hosted by The Financial Brand
Date: February 2021
According to Statista, there are 21,000 fintech startups in the world – in addition to about 90,000 banks worldwide that are rapidly digitizing themselves. Alex Kreger points out that “it’s not easy anymore to ensure the success of digital financial services among thousands of competitors. Even some fintech challengers struggle to stand apart”. Read this story for a practical perspective on the already-crowded fintech world.
- DESIGN MATTERS: It is no longer a secret that gaming companies spend millions on digital architecture and game design. “Digital financial services are no exception. The success of digital financial products, putting it simply, boils down to the value that the financial product provides to its customers.”
- FUNCTIONALITY IS KEY. But design is not everything when it comes to money, savings and major life decisions like mortgages. The value of financial services is in helping to manage finance and perform financial operations. “So, functionality is key”.
- DO IT FASTER AND EASIER: Now that the design and functionality are in place, what else is to be done to ride the wave of NextGen banking? “You need to do it faster, more easily and more clearly than your competitors.”
This article published by The Financial Brand also offers reality-check insights and action points – it is definitely a good read if you’re working in the banking industry.
MAIN PHOTO Credit: Marvin Meyer, Unsplash
This article is part of a series of articles dedicated to the banking industry. FintechOS talked to leading companies, from incumbents and startups to accelerators and consultants, to get to the heart of the question: What does digital transformation look like?