10 2018BankingTrends

towatchin

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The wave is starting in Europe, where new regulations, such as PSD2, are forcing European banks to open certain banking services to third parties. In other markets, like the U.S., a move toward open banking is coming from fragmentation of the traditional vertically-integrated bank value chain.

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OpenBanking

Put it inthe Cloud

Twenty-five years ago, banks were debating whether it was safe to execute electronic transactions over the nascent internet or if they should instead build their own proprietary networks. Twenty-five years from now, the current debate about the safety of using the public cloud for banking will seem similarly quaint.

AgileProjects

Traditional mainframe core banking applications are not well suited to the digital economy. The world of overnight batch processing and 4 p.m. transaction cutoffs sits uncomfortably with customers’ expectation of real-time banking. look for banks to “freeze and wrap” — using existing core systems as books of record, while moving customer engagement and analytics to the cloud.

Digital or Out

Customers today expect to be able to sign up for new banking services online. In 2018, a failure to provide true digital origination will start to move from a disappointment to an existential threat.

Man or Machine

One of the biggest threats banks will face in the next year is synthetic identity fraud. It’s a phantom crime that is costing banks billions of dollars and countless hours as they chase down people who don’t even exist. In 2018, banks will need to get better at sorting the real customers from the fake, without undermining the benefits of a great digital customer experience.

FewerBranches

Just as travel agencies are quickly becoming a thing of the past, digital banking will continue to shrink the number of global bank branches by 4% to 5% per year. The challenge now is to try and get to that right mix of branches and digital offerings as quickly as possible.

FinTechsare Friends

Despite the tens of billions of dollars of VC money piling into the fintech sector over the last 5 years, the meteor strike that was going to wipe out the banking dinosaurs hasn’t happened. Instead, fintech has lit an innovation flame under the incumbent banks and accelerated their evolution.

Robots getto know you

Fewer than 10% of U.S. customers say they fully trust their bank. In 2018, artificial intelligence may start to reverse that trend by providing contextual, holistic advice that is truly in the customers’ best interest. In 2018, look for banks to start to use AI to do right by their customers, regardless of the short-term P&L impact.

Is bitcoinlike tulips?

Between 1634 and 1637, the price of a tulip bulb in Holland skyrocketed to the point where a single flower cost the same as 10 times the annual wages of a skilled worker. In 2017, the price of Bitcoin rose by 13 times, and like Dutch tulip bulbs, it’s currently functioning as a purely speculative asset.

US Bankingcomeback

Ten years after the start of the global financial crisis, European banks are still drowning in new regulations that require billions of Euros in investments at a time when the pretax profitability of the European banking industry is still 50% of what it was in 2006. In the U.S. however, the regulatory tide is receding in favor of “a more balanced approach.”

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Read the full article at https://www.forbes.com/sites/alanmcintyre/2018/01/03/bye-bye-bank-branches-hello-cloud-10-retail-and-commercial-banking-trends-to-watch-in-2018

according to Alan McIntyre