Digital Innovation in Retail Banking

John Mahon Head of Product Research and Strategy EdgeVerve R&D Lab

Our Most Recent Survey

140 senior bankers

Broad response base

7th year running

Respondents by Country Income Level

High income : GDP per capita > Int$30,000 e.g. United States

Middle income: GDP per capita Int$15,000-30,000 e.g. Hungary

Low income: GDP per capita < Int$15,000 e.g. China

$ 21%

$$ 37%

$$$ 42%

Key Findings

84% prioritising

investment in digital channels & customer

experience

57% consider analytics

a major disruptive force alongside mobility

41% see startups as

evolving threat

72% cited significant

industry disruption

Increasing competitive threat

10%

18%

27%

31%

41%

45%

73%

70%

63%

63%

50%

48%

18%

12%

10%

6%

9%

6%

0% 20% 40% 60% 80% 100%

Insurers

Retailers

Telcos

Banks

Start-ups

Tech companies

High Neutral Low

Threat of Industry Disruption from New Players

Using a scale of 1 to 7, the categories are High (6 or 7), Neutral (3, 4 or 5), Low (1 or 2)

With new technologies impacting the sector…

57%

Advanced

analytics or

big data

59%

Mobile

technology

53%

Open APIs Internet of

Things

47%

They are voting with their feet

Customer expectations are changing

The banking customer is taking control

They have alternatives

• Traditional banks

• New banks

• Start-ups

• High Street retailers

• Online retailers

• Payment providers

• Mobile operators

• Peer-to-peer intermediaries Have actively looked to open / close accounts

50%

Have more than one banking relationship

73%

60%

Go online to pay bills / make transfers

Source: E&Y Global Consumer Banking Survey 2015

Banking customers want

• A provider they trust

• Consistent, interactive digital experience across all channels – one view of their bank

• Fair prices

• Flexible, personalised products and services

• Amazon like experience

…and evolving customer segments driving change

Source: Goldman Sachs Global Investment Research's Future of Finance 2015

33% believe they won't

need a bank in 5 years

Less than half have a credit

card

84% say UGC & reviews

influence their decisions

Only half expect to use

cash weekly by 2020

50% are counting on

tech startups to overhaul banks

Millennials as agents of change:

Truly Digital Banking

69% of banks don’t have a systematic digital strategy

Our research indicates that only

31% of organizations believe they have

a systematic digital strategy

Truly digital – What it’s not

Just adding new channels

Adding delivery of banking services on new devices

Enhancing same old banking business models with digital technology

Giving legacy processes a digital facelift

Automating existing processes without reimagining

+

+ +

x

Truly digital banking paradigm has four standout characteristics

The customer is the focal point

Ecosystem before bank

Insight ahead of everything

Ubiquitous automation

Degree of digitization increases

Renewal

Classical

Adaptive

Shaping

Visionary

Decide on your strategic approach

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FINACLE POWERS

16.5% banked population

Banks across 84 countries

Over 547 million customers

of the world’s adult

14

Thank you John.mahon@edgeverve.com