Article Synopsis :
The next 10 years will see more change in the banking industry than in the previous century.
Technology is an influence, but it is only one of a number of interrelated, structural factors that cover demographic, socio-economic, regulatory and environmental changes.
People will live longer and healthier lives, take part in the sharing economy and change jobs more frequently, have better access to services to support their health – with physical and mental – be more environmentally aware, and wealthier than people are today.
This will transform every aspect of our lives and banks must account for financial wellbeing to help customers achieve, meet financial obligations, develop financial freedom and ultimately give them financial control and security through the good times and the bad.
This KPMG paper identifies four key areas to enhance the delivery of financial wellbeing.
The importance of data will continue to increase as everything becomes connected to and through the internet and the Consumer Data Right extends beyond open banking to all sectors of the economy. Different sets of data will merge to create a comprehensive narrative of each individual’s life. The significance of data will allow customers to get more value from products and services while demanding higher levels of security and transparency on the management of their data.
The attraction of this data will draw in new entrants, such as neobanks and banking platforms. Incumbents will look at how they can extend their business models beyond their core offerings. Companies from other sectors will start to bundle financial services with their own products, blurring the sectoral boundaries.
Governments and regulating bodies will have to be alive to the new ways of conducting business to identify and manage risks and regulate activities in a broader universe. They will be judged on how well they protect consumers.
This is driving change, but also making it possible. Technologies that will have the greatest impact will be artificial intelligence (AI), blockchain, biometrics, 5G, cloud computing, internet of things (IoT), augmented and virtual reality (AR/VR) and quantum computing. These will transform the nature of services, and also how they are delivered and consumed.
The banks that succeed will be those who have brought together all of the aspects into their business model. A piecemeal approach will not redefine the customer relationship and they will be left behind.
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Digital Insurer's CommentsThis paper from KPMG identifies four key areas that banks must focus on to remain relevant to the market and to futureproof their businesses for the digitalised age.
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