Retail banks’ priorities are set to switch in the next year, with revenue growth taking precedence over cost control and compliance management.
Research from analyst Ovum found that although cutting expenditure and complying with regulations will continue to be vital for retail banks, they will need to focus on revenue enhancement to provide a sustainable return for their shareholders.
Ovum has predicted that banks’ prioritisation of revenue growth means they will focus on customer experience management and further investment in customer-facing business processes. For the former, digital channels, in particular, will be in the spotlight. This is expected to result in an improvement both in the efficiency of client interaction and in customer satisfaction.
To achieve growth, retail banks will also spend more on IT infrastructure. The digitisation of retail services will continue, creating ongoing security challenges and requiring investment to balance user experience with robust security. But the key technology shift will be the incorporation of analytics into business processes at an operational level, particularly in the areas of risk, marketing and operations.
“Retail banking has been undergoing a structural shift since the financial crisis, the repercussions of which continue five years later,” says Daniel Mayo, practice leader, financial services technology, at Ovum. “However, the sector now appears to be moving into the next phase, driving a new set of priorities or strategies, with a focus on revenue growth, and making customer-centricity key.”
Sally Percy is editor of The Treasurer