News

Retail banks on recovery path but face disruptive challenges

May 12, 2016

Global retail bank revenue rose 3 percent last year, to hit nearly $1.6 trillion, and while the industry is on the path to financial recovery there are some major disruptive challenges ahead.

The recovery is described as "tentative," in a new Boston Consulting Group report and retail banks must begin developing greater digital capabilities to truly simplify operations and boost customer service.

Asia is dominating when it comes to industry growth but there are optimistic signs in North America.

"The top performers continue to widen their lead over the rest of the pack," stated Ian Walsh, a BCG partner and a co-author of the report, in an announcement. "Banks that hope to join them at the top will need to jump-start their digital transformation now."

Dramatic customer experience via improvements will foster greater efficiency, quality, and speed and ultimately drive 50 percent more revenue per customer than peers, according to the report.

A digital strategy built around four goals will drive success:

• Understand, strengthen, and deepen customer relationships;

• Reimagine customer journeys from front to back using digital technologies;

• Create agile, simple, and highly collaborative organizations; and

• Enhance digital capabilities.

"The overly deliberate and cautious approach to digitization taken by many banks is outdated, leaving them fighting yesterday's battles and shrinking in today's markets," stated Michael Grebe, a BCG senior partner, global topic leader for BCG's Simplify IT program, and a co-author of the report.