In recent years, the way we bank has undergone a radical transformation. When people had to mail a check via email to pay their bills and banks closed at 3.30 pm on a Friday, the weekend was long gone. Consumers’ research, communication, and purchases of lifestyle services have all been radically altered by technology, and their use of financial services is likewise changing. According to this report’s predictions, Britain’s financial system will likely look drastically different in 2030 than it does today, yet banks may still have a promising future.
Change happens swiftly, according to Phil Hingley, Director of Financial Services at ThoughtWorks UK. Challenger banks and fintech firms do not disrupt the financial services industry. Their business models’ inherent and covert weaknesses as well as their reliance on decades-old procedures that make change difficult and expensive cause disruption. The catalyst will be technology.
People’s banking habits, attitudes toward various brands, and the services they anticipate receiving from banks were all revealed through a YouGov study. Here is a sneak peek at a few of the outcomes:
- In the coming ten years, three out of five people in the UK anticipate that there will be no need for cash at all in the coming ten years.
- Most respondents said that it should be the law that every adult in the UK has the right to essential banking services.
- For people who cannot afford to acquire and use laptops and cellphones at home, 42% of respondents believed that bank branches should offer access to technology.
- According to 23% of Gen Z, bank offices would eventually transform into “community hubs” for financial education and function like bank “genius bars.”
- Many members of the younger generation believe that drones and robots can take the place of human branch employees.
Technology has also made it simpler for a wave of new entrants to establish a foothold in the industry, especially in light of recent legislation like GDPR and Open Banking. In order to draw customers, competitor firms provide fresh service offerings, and technology behemoths like Apple, Amazon, Google, and Facebook are creating their own payment systems. Modern challenges to traditional banks include heightened competition, technological improvements, a data-driven economy, and shifting client demands. Although the future may appear unpredictable, these innovations provide banks with the growth potential to transform into adaptable digital businesses and spur transformation.
Being forced to deal with outdated technology and a culture where organizational silos are not focused on business goals might make it difficult to transform into a modern digital firm. According to Isa Goksu, CTO of Financial Services at ThoughtWorks, “Open banking has given the entire sector a new dimension-Open Life, a centralized management console for your wealth and wellness.” In order to adapt to this new paradigm, banks must dismantle their cultural monoliths and adopt a digital attitude. Banks may see a return on their digital transformation efforts if they use tech-led working methods and bring in experts in legacy modernization.
By utilizing their size of operations and the strength of their ecosystems, large financial services providers can provide novel services that are challenging for new entrants to the market. Banks must develop platforms that help customers achieve their goals by tying together their financial ecosystem. Additionally, it calls for the evolution of business models away from fees and other hidden costs toward a hyper-personalized future based on more equitable economics and fresh sources of wealth. The banks of the future will be those that successfully combine technology and customer focus.