Threat posed by the commoditization of banking in terms of pressures on margins and reduced customer loyalty is constantly growing. However, data analytics will enable banks to gain an edge by offering insight that is tailored, relevant, and actionable.
For open banking and data analytics to fulfil its potential, consumers must be willing to give consent for their data to be shared with their bank. 63% of North American consumers are willing to share data with their bank in order to receive relevant product and service recommendations. Evidence suggests they will allow this if they obtain clear material benefits in return.
Several banks and third-party providers launched artificial intelligence (AI) based systems PFM apps in 2016, and these will grow in number and sophistication during 2017. Several banks will partner with independent PFM providers to offer co-branded solutions for their own customers. AI will also impact back office operations, where the technology will be employed to reduce losses due to fraud and cyberattacks, and improve productivity by relieving employees of the need to conduct routine tasks.
"2017: Key Trends in Retail Banking" identifies six key trends that will shape the retail banking market in 2017, to which providers will need to respond and adapt.
Some of the key findings include in this report include:
- The UK and the EU will be at the forefront of moves to practically apply the principles of open banking in 2017, spurred on by regulatory demands. The focus in 2017 will be primarily behind the scenes: banks will collaborate to establish standards and protocols on security, data protection, and accountability.
- While open APIs will facilitate access to the additional data needed to provide high-quality data-led insight, it is through AI that such analysis will be provided. From the consumer perspective, AI will manifest itself through the medium of chatbots.
- Fintech will come under increasing scrutiny from global regulators in 2017, with two key objectives in mind: keeping on top of new innovations and encouraging the emergence of new entrants.