Many have predicted the fall of the traditional bank, as disruptive new entrants win share by offering a better customer experience through new products and channels. Yet, despite the emergence of new competitors and models, we believe the traditional bank has a bright future – the fundamental concept of a trusted institution acting as a store of value, a source of finance and as a facilitator of transactions is not about to change. However, much of the landscape will change significantly in response to the evolving forces of customer expectations, regulatory requirements, technology, demographics, new competitors and shifting economics.
Banks need to choose what posture to adopt against this change – whether to be a shaper of the future, a fast follower, or to manage defensively, putting off change. Staying the same is not an option. We believe that the winners in 2020 will not only execute relentlessly against today’s imperatives, but will also innovate and transform themselves to prepare for the future. This future will require institutions to be agile and open, ready to explore different options in an uncertain world.
So is this change a revolution, or an evolution? In truth, it is both. All the signposts for change are here. Many players are innovating and experimenting with new products, delivery channels and analytics. The industry has historically changed slowly – evolutionary change. And the changes we envision are less about imagining some unknown future, and more about implementing and integrating all the things we know today (see the sidebar on the next page). Yet the pace of change is increasing rapidly – banks that fail to shift gear risk being left behind. And if any institution could truly master all the priorities we set out in Section 3, it would be revolutionary indeed.
We look forward to engaging in a provocative dialogue with you and your colleagues, going forward. We would be pleased to share additional points of view, information and insights, as appropriate. Feel free to reach out to one of us or your existing PwC contacts to start the dialogue.