Report Summary
Regulation will be at the forefront of the minds of many executives at global retail banks in the years to 2020. Banks must implement key structural changes, such as ring-fencing retail and business deposit-taking from other, riskier parts of their businesses, particularly investment banking. At the same time, they face seismic shifts in customer demands and expectations. Modern, post-crisis retail banking customers are more aware of financial products and choice, and more dubious that their own banks always work in their best interests. That requires greater attention to detail and changes to sales practices—simpler, more transparent products and a less conflicted sales channel.
The digital age is turning banking on its head. Investors want to apply for savings, investment and loan products online or via smartphones and tablets, at a time that suits them, not just during working hours. They also expect transactional processes—cheque clearing, direct debits and standing orders, as well as online payments to electronic retailers—to be easy, real-time and low-cost or free of charge. Getting there will require innovation and significant investment in architecture and systems, something that many banks can ill afford right now as they rebuild their capital bases. However, those that do not keep up with “new” banking may lose out to new competitors, both banks and non-traditional players. In this environment, The Economist Intelligence Unit surveyed 242 senior executives at retail banks around the world to learn how they are adapting to regulatory, customer and technology changes. The key findings of the research are as follows.
Research Methodology
In December 2013 and January 2014 The Economist Intelligence Unit, on behalf of Temenos, surveyed 242 global banking executives to investigate the views of retail banks on the challenges and changes they face in the years to 2020 and how they are responding.
Respondents were drawn from across the world, with 76 from Asia-Pacific, 91 from Europe, 66 from North America and nine from the rest of the world. Of these, 95 are from banks with annual revenue of less than US$500m; 45 from banks with US$500m-1bn; 44 from banks with US$1bn-5bn; and 50 from banks with revenue of US$5bn and more.
All are senior, with 100 at C-suite or board level and the remainder senior executives. In addition, in-depth interviews were conducted with 13 senior executives from banks, some global, some regional, some small and tightly focused. Our thanks are due to the following for their time and insight (listed alphabetically).
