The banking industry is changing. In the words of sci-fi author William Gibson, “the future is already here – it’s just not evenly distributed.” In China, a payments revolution is underway that constitutes a true “Great Leap Forward.” While the U.S. is still mapping the path to real-time payments, and scrutinizing the disappointing penetration of mobile payments, China is well on the way to being a cardless, as well as a cashless, society. Nearly 50% of WeChat’s billion users have now paid at a retail store using a QR code, while Alipay (with another 500 million users) is seeking to bypass the phone entirely with its “pay with a smile” facial recognition system.
Part of the reason we see radical change in markets like China is the lack of inertia associated with well-established banking business models. But the “it won’t happen here” brigade in developed markets are beginning to see enough signs of disruption to be worried. In Europe, the leading fintech “challengers” are passing the 1 million customer threshold. In the U.S., more than one-third of small- and medium-sized businesses now borrow from non-traditional lenders, and traditional banks are few and far between in the list of top 10 mortgage originators. In U.S. consumer deposits, the story is less about disruption from the outside than consolidation within the industry, with the top banks now seeing returns from their massive investments in the digital customer experience. In 2017, the top 3 U.S. banks controlled 32% of deposits, up from 20% in 2007, and also took 50% of new account openings. If you are a small U.S. regional bank, that feels pretty disruptive, even if it isn’t Amazon taking your customers (or at least not yet).
In this year’s edition of our Banking Technology Vision, Accenture has tried to go beyond these current visible trends and identify what’s next in terms of things that could disrupt the retail and commercial banking industry. To do so, we surveyed nearly 800 bankers in more than 25 countries and identified 5 technology trends that every bank should understand and incorporate into their planning.
- Citizen AI
- Extended Reality
- Data Veracity
- Frictionless business
- Internet of thinking