Infosys Finacle, part of EdgeVerve Systems, a wholly-owned subsidiary of Infosys and Efma have unveiled the ‘Innovation in Retail Banking’ report. The report highlights the top trends that are transforming the way banks operate and engage with customers, with a special focus on their plans and actions in the wake of the Covid-19 pandemic. More than 750 banks and financial services companies from across the world participated in the 12th edition of the report.
With the present medical crisis looming large, the report revealed significant opportunities for digital maturity. Only 7% of respondent banks have deployed digital transformation initiatives at scale with commensurate benefits. Further, many banks have shown a dip in their self-perception this year, with only 9% saying they were innovation pioneers, compared to 14% last year.
Scaling digital transformation, improving customer engagement and cost management, however, have emerged as the top three priorities going forward, for banks, with focus on agility driven by cloud adoption. Respondents have spoken of increased investments in mobility, advanced analytics and open banking APIs, as areas expected to have the biggest impact on banking over the next 12 months.
Sanat Rao, Chief Business Officer & Global Head, Infosys Finacle said: “Ensuring employee safety, fulfilling remote delivery, and extending credit lines to help business clients are consuming banks’ attention throughout 2020. At the same time, they also need to allay shareholders’ concerns about declining growth, profitability, and valuations. The latter will be especially challenging given the grim conditions: only 16% of survey respondents were hopeful that 2021 would bring significant growth opportunities. These are priorities competing for time, investment, and other resources. The only way to balance these competing priorities is digitisation at speed and scale in areas ranging from customer engagement and cost management to business model innovation and people empowerment.”
Key takeaways from the report include:
- Banks have identified 7 keys to digital transformation, with the most important components being leadership/culture, data and analytics and CX – While there is an understanding of the importance of digital transformation, most firms rate their efforts as insufficient, with 62% stating their digital deployment as partial or digital investments not delivering as expected.
- Respondents voted their three biggest challenges for undertaking digital transformation as – time and cost of implementation (71%), system integration (66%) and legacy technology landscape (62%)
- Mobility (73%), Open APIs and AI/Advanced Analytics/Machine Learning (64%) were seen as the most important technologies having the biggest impact on banking over the next 12 months, with cloud computing (58%) being an area of great importance in the future. – Much of the innovation in 2020 was seen as having taken place in Lending (40%) and Payments (38%).
- Over 64% identified product delivery channels as an area which would see an overwhelming preference for innovation over the next five years.
“With the onset of Covid, building an innovative culture became more important than ever in banking. As organisations ramp up their digital transformation efforts, the application of data and advanced analytics, combined with the deployment of new technologies to support redefined business models will set leaders apart from followers in banking,” said Jim Marous, Owner and CEO of the Digital Banking Report.
“Banking needs to find a transformational response to the Covid-19 pandemic if it is to move beyond the current crisis and to capture the short window of opportunity that will exist for early movers in 2021,” added Rao. “Achieving this will mean ensuring customer-centric innovation plays a meaningful and well-balanced part of those transformation decisions. Customers, and consumers specifically, have already shown in 2020 their ability to adapt to doing more digitally and online – the banks that win out will be those that can demonstrate they are equally agile and forward thinking.”