Innovation in Retail Banking Efma

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Innovation in banking is not universal with many, organizations needing to create a culture that will embrace. the change that is occurring in the marketplace take. qualified risks and be willing to disrupt current business. models to succeed,Jim Marous,Owner and Publisher,Digital Banking Report. 2018 Efma and EdgeVerve Systems Limited All rights reserved 2. Innovation in Retail Banking 2018 10th Anniversary Edition. Letter from the Author 5,Message from the Sponsor 6. Key Research Questions and Takeaways 8,Innovation Case Studies Summary 9. Executive Summary 10,Section 1 Innovation Over the Past Decade 14.
Section 2 2018 Innovation Trends 27,Section 3 Digital Transformation Trends 41. Section 4 Deployment of Advanced Technologies 54,Advanced Analytics AI Machine Learning. Open Banking APIs,Cloud Technologies,Chatbots and Voice Technologies. Section 5 Competitive Trends 73,Section 6 Interviews with Industry Leaders 78. 2018 Global Innovation Award Winners 86,Final Thoughts 96.
About the Research 101,Online Survey Questions 104. About Us 106, 2018 Efma and EdgeVerve Systems Limited All rights reserved 3. Innovation in Retail Banking 2018 10th Anniversary Edition. Efma and Infosys Finacle are proud to present we haven t yet seen the full impact of open bank. the 10th annual Innovation in Retail Banking ing as banks are still considering a range of. report After a decade of charting the develop objectives for how they will use it. ment of innovations and business models in re, tail banking this year s study is a milestone that While banks in this year s survey believe they are. marks just how far the industry has come and well positioned to use open APIs conversational. how new technologies are still driving transfor interfaces cloud processing and mobility weara. mation We also look ahead at what s in store bles we found an ongoing lack of readiness to. for banking in 2022 leverage advanced analytics and machine learn. ing a factor that could inhibit other technology, Customers remain at the center of banks innova advancements and innovation efforts. tion efforts as organizations across the industry, move to improve digital customer experience Looking ahead at 2022 banks continue to see.
across new touch points and channels In line platform based competitors such as Amazon. with this we found that delivery channels are the TechFin firms and fintech organizations as the in. key focus of innovation with most banks saying novation leaders We also found an increasing. that mobile and online will be the primary distri awareness of challenger banks as competitors. bution channels in four years time compared to last year while non fintech or bank. ing firms and incumbent banks were seen as the, In terms of product innovation we found banks least threatening. focusing on payments mobile wallets and lend, ing as the most important areas of banking We would like to thank all the banks that partici. These are also the three areas where non tradi pated in our 10th innovation survey and agreed. tional financial institutions pose the biggest com to be interviewed for the study Not only do they. petitive threat provide invaluable insights into retail banking in. novation today they also contribute to a bigger, A lot more banks are taking a longer view picture of the industry s innovation over the past. of returns from their investment in innovation 10 years We hope that our readers find this. compared to last year s report We also found study informative inspiring and useful. banks prioritizing an innovation culture as the,primary driver of innovation More banks now. have an innovation strategy in place although,growth is slow in this area Banks are using a.
variety of approaches to support their innovation,efforts Notably we ve seen a significant. increase in the desire to partner outside their,organizations compared to previous surveys as. banks realize that internal development may not,be enough to deliver the speed and customer. centricity they re aiming for,Vincent Bastid Sanat Rao. Banks across the world see open banking APIs Chief Executive Chief Business Officer. as the top technology for the future of innova Officer Efma Global Head. tion ahead of artificial intelligence and machine Infosys Finacle. learning chatbots and other technologies But, 2018 Efma and EdgeVerve Systems Limited All rights reserved 4.
Letter from the Author, It was 10 years ago that Efma and Infosys Finacle We also look at the trends in digital transformation. published the first edition of the Innovation in Retail the deployment of advanced technologies the im. Banking report During this period the banking pact of external competitive forces and a review. industry has needed to respond to the impact of of case studies from the winners of the 2018 Efma. the financial crisis the digitalization of the industry Innovation Awards Finally throughout the report. and mobilization of the consumer an influx of we provide perspectives of industry leaders as they. traditional and non traditional competitors new look back at the past and into the future on how. regulations and continued pressures on margins innovation has transformed the banking industry. Despite these challenges or maybe because of It is clear from this year s report and the reports. them we have seen an increase in the commit from the past that great progress around innova. ment to innovation from institutions small and large tion has been made but that there is still much. Innovation has also been the driving force behind to do The increasing demands of the consumer. fintech as a sector with new entrants offering com fueled by digital experiences from technology lead. petitive alternatives focused on digital delivery and ers is relegating the banking industry to playing. a focus on an improved customer experience a game of catch up This is especially true with. smaller organizations who often lack the resources. While the fintech sector was initially viewed as a to deliver the digital functionality of larger peers. threat to traditional banking organizations there is. now the belief that these smaller fintech firms can To move forward at the speed of change will require. become great collaborators or even investment a doubling down on providing a culture of innova. opportunities The potential for partnership is born tion throughout organizations combined with a will. in the reality that the strengths and weaknesses of ingness to embrace change take appropriate risks. both traditional banks and fintech firms are served and disrupt what has been the norm in the past This. well by joining forces requires getting out of our comfort zone and finding. a way to serve the consumer in the way they are, To celebrate the 10th year of this important industry being served by big tech alternatives. report we start by taking a look back over the, previous nine years of this publication providing a Jim Marous. snapshot of the marketplace and innovation trends, through the years From an increasing investment Publisher Digital Banking Report. in innovation to the shift from internal to externally Author Innovation in Retail Banking 2018. focused breakthroughs the continued strength of,Eastern European and the developing financial.
marketplace banks as innovators a lot has hap,pened in the last decade. 2018 Efma and EdgeVerve Systems Limited All rights reserved 5. Innovation in Retail Banking 2018 10th Anniversary Edition. Message from Infosys Finacle, I am delighted to present the tenth anniversary ing and progressive banks at the forefront of dig. edition of the annual Innovation in Retail Banking ital innovation have also invested in the more. study in association with Efma and Jim Marous strategic digital engagement suites and hubs. This edition marks an important milestone in our, treasured partnership and endeavor to monitor These banks are now moving the needle on inno. and chronicle developments in retail banking vation with new digital models enabled by open. banking initiatives across the globe API led inno, With insights from over 300 leaders and prac vation emerged as the most important area of fo. titioners in the industry this report invites you to cus for banks this year reinforcing the sweeping. review a decade in banking innovation and also realization that the future of banking is open. take a look into the future Research findings ar, ticulated and revealed in the following pages re Who is winning the innovation battle.
count the unfolding of a phenomenon we seldom What has become profoundly clear in financial. realize and recognize as we live through it the services is the firm footprint of technology giants. phenomenon of evolution Innovation efforts and such as GAFA and nimble digital players such. practices in banking have evolved steadily over as FinTechs With the democratization of data. the last decade Three crucial observations a these new market entrants are being seen as the. reflection of our experience in the industry show frontrunners for innovation in the industry. According to this year s findings digital com, Who is the customer talking to merce platforms such as Amazon and Alibaba. A few years into the new millennium we were are likely to emerge as clear innovation leaders. still carrying out most of our financial transac by 2022 Consumer technology companies such. tions through a teller at the bank branch The as Google and Apple come a close second. branch housed nearly 50 of the total number The growing realization that the biggest threat. of customer interactions In a striking display of for banks comes not from within the industry but. the power of the exponential less than 15 years from new players with advanced digital capabil. later over 90 of customer interactions have ities in critical areas of competitive differentiation. moved away from the branch to digital channels is making banks notch up their innovation efforts. such as online banking mobile banking digital Progressive banks have already begun pre. wallets and call centers What s more industry paring for this reality by cultivating ecosystems. estimates suggest that by as early as 2022 near and investing in platform business models Our. ly 50 of these transactions will move beyond survey this year sought to assess what banking. bank owned channels to channels managed by practitioners think about the change in business. third parties thanks to digitization and custom model in banking Findings reveal that the tradi. er centric regulations tional front to back closed model is visibly disin. Where are the investment dollars flowing tegrating into specialist roles in the new world. of banking which places a growing premium, Investment in banking innovation has increased in on deep expertise and customer relationships. lockstep with the pace and direction of change Banks are aligning themselves more strongly with. Our research findings over the years suggest a manufacturing or distribution roles to affirm their. significant investment in digital channels Lead position in the platform economy. 2018 Efma and EdgeVerve Systems Limited All rights reserved 6. Innovation in Retail Banking 2018 10th Anniversary Edition. Transforming for the digital future The dizzying pace of digitization in a world. where windows of opportunities open and shut, Research findings and customer accounts from faster than ever demands a sharp vision and. our experience with financial institutions in over agility and creativity to translate that vision into. 100 countries indicate that as banks continue action And banks do not have the luxury of a. to adopt and transition to new digital business trade off between an unrelenting focus on the. models the great enabler of change technol digital future and delivering on the demands of. ogy is becoming an inhibitor especially for the present It is critical to seamlessly juggle the. incumbent banks saddled with legacy systems dual orchestra of transforming for the future and. excelling at the regular and the routine,In response to the digital disruption brought in. by modern technologies empowered customers With this research we aim to help banks sharp. agile competition and changing regulations all en their vision bolster their innovation strategies. banks have introduced digital initiatives Amidst and accelerate their digital transformation jour. constraints of capital resources or skills many ney The study brings together powerful insights. banks administered a facelift of select touch about innovation in the industry and provides a. points and pockets largely limited to the front benchmark for investments in various areas of in. office instead of a holistic transformation that novation We hope it helps you prioritize your in. is digital to the core Their huge legacy estates novation investments and empowers you in your. hinder their ability to respond to market changes unique journey in this rapidly evolving world of. swiftly digital banking,Not surprisingly a whopping 74 of banking.
leaders and practitioners this year indicated,technology enhancement as the top area Sanat Rao. of investment Invariably all banks are now, moving beyond peripheral digitization to truly Chief Business Officer and Global Head. digital transformation with re imagined customer Infosys Finacle. journeys for frictionless experiences larger,ecosystem play insig. Innovation in Retail Banking 2018 10th Anniversary Edition I am delighted to present the tenth anniversary edition of the annual Innovation in Retail Banking study in association with Efma and Jim Marous This edition marks an important milestone in our treasured partnership and endeavor to monitor and chronicle developments in retail banking With insights from over 300 leaders and prac

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