The banking sector is at a turning point. There will be a significant need for banks to undergo fundamental transformations in the future, driven mainly by technology such as artificial intelligence, machine learning, augmented reality, and open banking platforms. Of course, we may not know yet exactly what banks will look like in the future, but banks, as always, will be able to successfully transition, grow rapidly, and become more profitable.
To achieve a successful transition, the most important element will be to invest in the readiness of the human capital to mitigate resistance and reach digital maturity. Human capital is the heart of innovation, they hold the passion and creativity to reimagine business models, strategies, processes, technologies. Advanced training and education for both sides of the transaction is needed, both employees and clients need progressed development and learning. If banks invest in human capital and education, everything else will follow.
This transformation will require banks to look beyond mere financial services, cross-industry consolidation will play a major role in how banks operate and the services they offer. Banks will focus on offering more distinctive customer needs, partnering with tech giants and other non-bank organizations. These cross-industry consolidations will offer an abundant horizon for opportunity, new revenue streams, and higher margins. If banks are open to adopting these future platforms into their strategies, they have a chance to thrive.
But this is one dimension of the equation for the future of banking. Other external factors are uncertain, such as new technology innovations, regulation, and geopolitical shifts. These can drastically have an impact on the course of how this sector will develop.
The biggest danger is losing sight of changing customer behavior and losing our customer base to other non-banking players. Moving fast is key, banks need to be ready to hit the ground running and dive deep into real-time services and create and cater to customers’ individual and unique needs to be able to compete.
The truth is, banks remain to have substantial advantages to help them avoid decline; their reputations are extremely powerful, familiar, trusted, experienced, secure, and regulated, while new entrants of alternative banking providers lack all these. Banks also have a strong position in controlling capital flows, impacting themes and customer behaviors, they keep investing and reaffirming their roles in society which leads to secure relationships with policymakers.
Banking keeps reinventing itself, and the banks that embrace the transformation will have a stronger positioning in the future; incorporating new platforms, adopting new technologies, and understanding shifting customer behaviors will eliminate the barriers and shape into an ecosystem that rewrites the banking sector’s narrative.
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