Forrester’s view on the future of banking is here – examining the changes that we expect to play out over the next decade of retail banking. The drivers of the future are evolutions of the past – some playing out now, others that will be far more prominent by 2025 and table stakes by 2030.
In order to compete in a world with increasingly blurred boundaries — where smart devices and platforms such as Google can deliver the banking experience, ride-sharing apps can supply loans, and cars can be distributed ledgers — banks must ruthlessly determine and play to their strengths. During the research four clear themes emerged.
Future banking will be invisible, connected, insights-driven, and purposeful.
By 2030 banks will be:
- Invisible. Leading banks will use technology and far deeper customer insight to insert financial services at the customer’s moment of need, often at the expense of brand visibility. Distribution models are evolving to make use of marketplaces and technologies such as open APIs and 5G to connect finance with homes, machinery, vehicles, and other devices. This will pose challenges for many banks as their retail brands become increasingly invisible to the end consumer.
- Connected. To remain relevant, banks must be present in the ecosystems and products that customers use; to do this, they must cease to see partnerships — and intermediation of brand — as a threat. Banks will assemble constellations of value — interoperable, trusted environments that enable collaborators beyond banking to weave value into frictionless, rich customer journeys. “Trusted advisor” status is what will differentiate banks from all other touchpoints that offer embedded financial services.
- Insights-driven. Banks will unleash insight from data and elevate custodianship of consumer trust. Their expanded role around consent and identity will enable consumers to have finite control of their financial and digital lives. Consumer trust is the critical asset here. Banks must firmly step up with advice and generate financial intimacy with their customers – customers that expect “RoC” — return on consent for that trust.
- Purposeful. Consumers will prefer banks that align with their environmental and social values in a more purposeful age, where local and cooperative principles align to matters of global responsibility. Open cultures that build and curate communities will set leaders apart as they grow values-driven ecosystems. Consequently, open innovation and engagement via code, content, and knowledge will create communities driven by a shared purpose, generating collective product development to benefit all.
Banks will have a stark choice: Own customers, or power finance. Few can manage both.
In the era of open finance, no bank can do it alone. Because of this we examine the future from three perspectives – that of the bank, that of the customer, and that of the collaborator. Each of these will play a central part in defining the next decade of banking. Some banks will pivot fully to be the platform and rails that other firms run upon, other (larger) banks will contest the tech titans for customer primacy and engagement, and some will do both. Banks will have to selectively leverage and extend the trust they possess and carefully choose their key battlegrounds.
Leading banks are already pivoting and rebooting their strategy — capitalizing on the COVID-19 driven pace of change and innovation and setting their course for the next decade. Forrester is on that journey with them.
If you’d like to learn more, please take a look at our new report on The Future Of Banking, and audio insights from our research interviews, accessed below. Please reach out if you have any questions – or would like to know how we can help you and your firm prepare for the future of banking.