Companies within the banking industry must adapt quickly in the coming months in order to be successful in 2020 and beyond. That’s according to a recent PwC report titled, “Retail Banking 2020: Evolution or Revolution?” which explains how the field is poised to change dramatically and how banks and their workers must adapt for this upcoming disruption.
As the report notes, there are many who believe that the traditional banking model may fail if it continues on its current course. PwC, however, takes a much different (and more optimistic) stance. “Many have predicted the fall of the traditional bank, as disruptive new entrants win share by offering a better customer experience through new products and channels,” according to the report. “Yet, despite the emergence of new competitors and models, we believe the traditional bank has a bright future – the fundamental concept of a trusted institution acting as a store of value, a source of finance and as a facilitator of transactions is not about to change.”
The report spells out just how the banking industry and its landscape will evolve. PwC states that it’ll be due to factors such as “evolving forces of customer expectations, regulatory requirements, technology, demographics, new competitors and shifting economics.” To help determine their findings, PwC surveyed over 550 client executives from leading financial institutions.
One of the key tenets to this change within the industry that will dictate banks’ success is fostering innovation, according to the report. “Technology will change everything – becoming a potent enabler of increased service and reduced cost; innovation is imperative,” according to PwC. It continues, innovation will be “the single most important factor” driving growth in the banking industry. However, there’s one main problem: “Banks today are not known as places where innovation thrives, nor are they the favored destination for top software engineers and other innovators.” Therefore, banks must take into their own hands the ability to hire much more effectively. This is imperative to achieve innovation and develop technologies that will drive growth. “Banks need to organize and manage differently – protecting and enabling talent, becoming agile in their development processes and being open to partnerships with outside institutions. Developed market executives will need to take more of an innovative mindset,” according to the PwC report.
It’s also obvious that the majority of the 550 respondents to the survey agree that innovation is critical to the industry’s success and financial future. “Innovation within the banking industry is considered to be somewhat or very important by 87% of respondents, yet in stark contrast, only 11% believe they are very prepared,” according to the report. What’s one way that banks need to develop innovation? Through smart hiring. “Banks need a new type of talent and a new way of managing it. They need to attract people who think big and who challenge the status quo, people who are obsessed with the customer and not with the process. Banks need to enable them to succeed,” as noted by PwC. In sum, the banking industry needs to undergo rapid growth in 2020 and beyond. By fostering innovation through intelligent hiring, the field can adapt to the many technological changes coming to our society and it’s imperative that they act quickly to find success.