Digital Transformation in Banking – Thematic Research

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Every sector is going digital. Due to the pandemic, consumer behavior began to outpace the channel capabilities of slow-moving incumbent banks, reinvigorating providers around digital transformation imperatives. However, there are clear tensions between tactical time-to-market priorities and the longer-term tech changes required to emancipate providers from legacy.

Institutions that focus on knowing their customer – not just from a regulatory perspective, but in terms of financial impact, behaviors, and prospects – will be best placed to succeed under conditions of expedited change. This will require the operational agility to recalibrate customer personas, risk models, and channel propositions.

The digital transformation in banking sector research report will help you to understand key technology, macroeconomic and political, and regulatory trends characterizing digital transformation efforts at incumbent banks.

Digital transformation in Banking: Key Trends

The key trends that are associated with the digital transformation theme can be classified into three categories: technology trends, macroeconomic & political trends, and regulatory trends.

  • Technology trends – Some of the key technology trends impacting the digital transformation theme include a renewed focus on core system modernization to improve agility and time to market, a zero-scratch redesign of core decision-making processes to realize breakthrough cost reduction, and others.
  • Macroeconomic & political trends – The key macroeconomic & political trends that will shape the digital transformation theme are heightened political and economic support for digital transformation, and declining private investment for new entrants creating a buyer’s market.
  • Regulatory trends – Some of the key regulatory trends impacting the digital transformation theme include Tensions between the need for regulations to move more slowly and more quickly, Increased regulatory risk around expedited digitization, and others.

Digital transformation in Banking – Industry Analysis

In 2017, online was significantly more popular for a greater range of tasks than mobile is in 2020. Meanwhile, telephone banking, once a forgotten channel amid digitization, has made gains as branch usage has reduced. The preference for telephone banking has notably increased for more complex queries such as making a complaint or querying transactions, but it has risen for all other tasks too.

The digital transformation in the banking industry analysis also covers:

  • Mergers and acquisitions
  • Timeline

Digital transformation in Banking - Value Chain Analysis

GlobalData’s digital transformation value chain consists of core banking/legacy systems (transaction processing), digital banking platforms (front-end channels), API management/strategy (middleware), money management/data infrastructure, and niche fintech partners.

Middleware: APIs have become the great enablers of digital transformation. Rather than optimize business structures, processes, and technologies for anyone’s one-to-one partnership, public APIs enable banks to optimize for all possible partnerships. This brings economies of scale and scope to partnering.

Niche fintech partners: Partnerships have been critical to expanding access to new products and processes at pace. In a COVID context, one recent example is Tully, providing a free-to-consumer digital outsourcing service that registers consumer applications, validates eligibility for payment relief, and shares that information with relevant partners in the network.

Leading Global Banks Associated with the Digital transformation Theme

Some of the leading retail banks associated with the digital transformation theme are DBS, BBVA, and JPMorgan Chase.

Leading Credit Unions/Building Societies Associated with the Digital transformation Theme

Some of the leading credit unions/building societies making their mark within the digital transformation theme are USAA and Navy Federal.

Banking Sector Scorecard

At GlobalData, we use a scorecard approach to predict tomorrow’s leading companies within each sector. Our sector scorecards have three screens: a thematic screen, a valuation screen, and a risk screen. The banking sector scorecard has two screens:

  • The thematic screen tells us who are the overall leaders in the 10 themes that matter most, based on our thematic engine.
  • The valuation screen ranks our universe of companies within a sector based on selected valuation metrics.

Banking Sector Scorecard – Thematic Screen

Banking Sector Scorecard – Thematic Screen

To know more about the sector scorecards, download a free report sample

Digital transformation in Banking Market Overview

Report Pages 42
Regions Covered Global
Key Trends Technology Trends, Macroeconomic & Political Trends, and Regulatory Trends
Value Chains Core Banking/Legacy Systems (Transaction Processing), Digital Banking Platforms (Front-End Channels), API Management/Strategy (Middleware), Money Management/Data Infrastructure, and Niche Fintech Partners
Key Global Banks DBS, BBVA, and JPMorgan Chase
Key Credit Unions/Building Societies USAA and Navy Federal

Scope

  • Banks’ channel migration efforts have not met expectations. Many commentators expected mobile to quickly displace all other channels, with attendant risks that consumer behavior could outpace banks’ channel capabilities. But this situation has not transpired.
  • Banks that view digital transformation as building new capabilities – around cloud, API, big data, etc. – tend to score better in terms of customer satisfaction, cost reduction, and operational agility than those that have merely digitized existing analog processes.
  • Leading institutions have prioritized core decision-making processes. Credit-related activities typically cut across front-office, risk management, and back-office procedures; integrating these actions into one straight-through process offers the biggest efficiency gains.

Reasons to Buy

  • Understand key technology, macroeconomic and political, and regulatory trends characterizing digital transformation efforts at incumbent banks.
  • Access the latest consumer survey data on evolving channel behaviors, provider preferences, and product holdings.
  • Identify leading digital transformation efforts based on cost/income and customer satisfaction metrics.
  • Access firm-level/case study insight on successful digital transformation efforts by incumbents.

Amazon
Facebook
Apple
Alphabet
Tinkoff Bank
AIB
Capital One
WeBank
Mbnk
Monzo
NatWest
RBS
Danske Bank
DBS
TSB
BBVA
Citibank
mBank
Revolut
Credit Agricole
Barclays
La Caixa
CBA
UniCredit
HSBC
Nordea
Intesa San Paulo
USAA
BNP Paribas
Deutsche Bank
ING
NU Bank
Bank of America
BMO
RBC
JPMorgan Chase
Lloyds
Temenos
Finastra

Table of Contents

Contents

Executive summary

Players

Thematic briefing

Digital transformation

Trends

Technology trends

Macroeconomic and political trends

Regulatory trends

Industry analysis

Mergers and acquisitions

Timeline

Value chain

Core banking/legacy systems (transaction processing)

Digital banking platforms (front-end channels)

API management/strategy (middleware)

Money management/data infrastructure

Niche fintech partners

Companies

Banks

Vendors

Sector scorecards

Banking sector scorecard

Who’s who

Valuation screen

Glossary

Further reading

GlobalData reports

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