BFC Bulletins Monthly News Digest
While 2020 will likely be remembered as the year we, as a world, got knocked down, 2021 is likely to be remembered as the year we picked ourselves up and (hopefully) learned some key lessons. With this in mind, Alan McIntyre, senior managing director at Accenture, came up with 10 key trends likely to affect banking over the next 12 months:
- Going big and staying home – a ‘winner takes all’ phenomenon is now emerging in retail banking. As the big get bigger, ‘too small to succeed’ will come to replace ‘too big to fail.’
- Neo-normalcy – the best traditional banks and the best neobanks will win customers this year, with the weaker incumbents and undifferentiated challengers left struggling.
- Banking app twilight – as banking completes its migration from street corners to screens, competition in retail and commercial banking will heat up, squeezing out standalone apps.
- Radical transparency – 2021 will be tough for traditional retail strategies, resulting in some banks leaning into radically transparent products to create a more compelling pitch.
- Getting credit – as pandemic-linked losses work their way through profit and loss statements, smart credit quality management that utilizes micro-segmentation will become a winning differentiator.
- Cash no longer being king – the pandemic will slingshot digital payments in countries racing to become cashless. In most markets however, getting rid of cash will still remain a long-term venture.
- Green inflexion – 2021 will be an inflection point in sustainable lending as central banks and regulators recognize the macroeconomic consequences of climate change.
- Uncertainty of U.S. regulations – the impact of the U.S. elections will become slowly become clearer in 2021. At the same time, many changes will remain uncertain, such as the fate of open banking in the U.S.
- Rising digital regulators – if 2020 was an accelerator for the banking industry, 2021 could be similar for regulators. We can expect a new type of regulator to rise in the near future.
- No more fluffy clouds – cloud computing is becoming a spectrum. Siloed thinking will become more dangerous.
