Banks face more challenges than ever after nearly two years of the Corona pandemic. COVID-19 has challenged the industry's resilience in unforeseen ways and given it another digitalization push. This rapid digital transformation brings with it many changes that banks will need to master in 2022.
In an annual study, the consulting firm Deloitte analyzes the most important trends in the banking industry. For the current study, 400 banks were surveyed worldwide. Based on the results, the following four key trends can be derived for 2022.
Trend 1: Implement flexible and hybrid forms of work,
Trend 2: Design a modern toolkit for risk and compliance,
Trend 3: Redesign brand promises,
Trend 4: Escaping the technology trap.
Trend 1: Realize flexible and hybrid ways of working.
The Corona pandemic accelerated the shift to virtual working. Credit institutions face the challenge of adapting job profiles and job roles to the new realities. In this context, there is enormous pressure to develop a flexible workforce that can implement a product- and customer-centric business model.
This situation is exacerbated by the battle for talent in the labor market. Particularly in the case of coveted positions, the balance of power has shifted in favor of the employees. Nowadays, the company also applies to the applicant more than ever before.
Care must also be taken to ensure that the new forms of work do not create inequality among employees. Banks should urgently train managers in dealing with a locally dispersed workforce. A sense of belonging should be fostered among everyone, especially in these challenging times, regardless of when and from where they work.
Trend 2: Design a modern toolkit for risk and compliance.
Banks are in a race against a rapidly evolving risk landscape that is more complex, dynamic and interconnected than ever before. New risks are emerging from sustainability imperatives, the cloud, artificial intelligence, blockchain, and digital assets. In addition, cyber risks and financial crime are taking on unimagined dimensions.
To manage these ever-expanding risks, banks need to develop a modern set of tools for risk and compliance. This should make risks integrative across business units.
Banks must treat these emerging risks with the same care as conventional risks Many new risk disciplines are still in their infancy, however. Often, banks lack the necessary data and lack internal staff with the necessary know-how. There is still a lot of work to be done in this area over the next few years.
Trend 3: Redesigning brand promises
Digitization is also changing customer expectations. Banks are using technological innovations to better understand customer needs. Based on these insights, they are expanding their product range and creating new customer experiences.
According to the study authors, more is needed: a modern bank needs shared values and an authentic corporate identity. Alignment with a 'higher' purpose, they say, must now be a core part of the brand promise - and be underpinned by appropriate actions.
Strengthening the personal level can also contribute to successful branding. However, it is difficult to build an emotional connection through digital interactions. Younger generations almost exclusively use digital channels for interaction - brand loyalty is correspondingly low.
The bank branch should therefore remain the primary place to build a deeper customer relationship. Banks can also positively differentiate themselves from the competition by making their digital channels, such as chatbots, more emotional and more human-like in their responses.
Trend 4: Escaping the technology trap
Globally, banks spend hundreds of billions of U.S. dollars on their technology programs. Despite this high expenditure, many institutions often do not have a holistic strategic plan for digital transformation. In addition, individual technologies are usually considered separately, resulting in too many one-off investments. All this prevents banks from exploiting the full potential of their investments.
To escape this technology trap, the bank's core system must be modernized in such a way that new technologies can be implemented and integrated as easily as possible. Key technologies here are artificial intelligence and cloud technologies.
In an annual study, the consulting firm Deloitte analyzes the most important trends in the banking industry. For the current study, 400 banks were surveyed worldwide. Based on the results, the following four key trends can be derived for 2022.
Trend 1: Implement flexible and hybrid forms of work,
Trend 2: Design a modern toolkit for risk and compliance,
Trend 3: Redesign brand promises,
Trend 4: Escaping the technology trap.
Trend 1: Realize flexible and hybrid ways of working.
The Corona pandemic accelerated the shift to virtual working. Credit institutions face the challenge of adapting job profiles and job roles to the new realities. In this context, there is enormous pressure to develop a flexible workforce that can implement a product- and customer-centric business model.
This situation is exacerbated by the battle for talent in the labor market. Particularly in the case of coveted positions, the balance of power has shifted in favor of the employees. Nowadays, the company also applies to the applicant more than ever before.
Care must also be taken to ensure that the new forms of work do not create inequality among employees. Banks should urgently train managers in dealing with a locally dispersed workforce. A sense of belonging should be fostered among everyone, especially in these challenging times, regardless of when and from where they work.
Trend 2: Design a modern toolkit for risk and compliance.
Banks are in a race against a rapidly evolving risk landscape that is more complex, dynamic and interconnected than ever before. New risks are emerging from sustainability imperatives, the cloud, artificial intelligence, blockchain, and digital assets. In addition, cyber risks and financial crime are taking on unimagined dimensions.
To manage these ever-expanding risks, banks need to develop a modern set of tools for risk and compliance. This should make risks integrative across business units.
Banks must treat these emerging risks with the same care as conventional risks Many new risk disciplines are still in their infancy, however. Often, banks lack the necessary data and lack internal staff with the necessary know-how. There is still a lot of work to be done in this area over the next few years.
Trend 3: Redesigning brand promises
Digitization is also changing customer expectations. Banks are using technological innovations to better understand customer needs. Based on these insights, they are expanding their product range and creating new customer experiences.
According to the study authors, more is needed: a modern bank needs shared values and an authentic corporate identity. Alignment with a 'higher' purpose, they say, must now be a core part of the brand promise - and be underpinned by appropriate actions.
Strengthening the personal level can also contribute to successful branding. However, it is difficult to build an emotional connection through digital interactions. Younger generations almost exclusively use digital channels for interaction - brand loyalty is correspondingly low.
The bank branch should therefore remain the primary place to build a deeper customer relationship. Banks can also positively differentiate themselves from the competition by making their digital channels, such as chatbots, more emotional and more human-like in their responses.
Trend 4: Escaping the technology trap
Globally, banks spend hundreds of billions of U.S. dollars on their technology programs. Despite this high expenditure, many institutions often do not have a holistic strategic plan for digital transformation. In addition, individual technologies are usually considered separately, resulting in too many one-off investments. All this prevents banks from exploiting the full potential of their investments.
To escape this technology trap, the bank's core system must be modernized in such a way that new technologies can be implemented and integrated as easily as possible. Key technologies here are artificial intelligence and cloud technologies.