Close to two out of three banking executives believe branch banking will be dead by 2026, a new report published this week by Temenos suggests.
Produced by the Economist Intelligence Unit, Branching out: can banks move from city centres to digital ecosystems? Includes a survey of 305 senior global banking executives and describes how branch closures, new technologies, and increased competition from fintechs, super-app platforms, and tech giants have driven digital transformation and changed business models.
New technologies like clouds, AI, and APIs will have more impact than customer demands and regulation over the next four years, 65 percent believe. If you unlock AI’s value you will be a winner and not a loser, 81 percent believe.
Technology’s main impact will be on CX, not product development, 81 percent believe. That belief is behind a surge in partnerships and tech development in these areas.
Innovation has accelerated during the pandemic too. Almost half (47 percent) of executives believe their institutions will evolve into ecosystems within two years as more banks begin to offer third-party products and services to others.
“The big shift for us was our belief that we could change fast if we really wanted to,” Standard Chartered global head of Digital Banking Aalishaan Zaidi said. “We would have never done the partnerships we are doing now.”
Score on for the little folks: microfinance for entrepreneurs (34 percent) and accounts for the unbanked (33 percent) were identified as the most promising inclusion-related business opportunities.
“Open Banking and increased competition from big tech and new entrants are causing banks to rethink their business models,” Temenos CSO Kanika Hope said. “Many now aspire to develop digital ecosystems that bring more human, differentiated experiences to their customers using the power of the cloud, SaaS, and AI.”