Sunday, November 7, 2010

Banking Industry Trends

The banking industry is under increased scrutiny due to the impacts of the velocity of change. Some of the changes are summarized below, but perhaps the most riveting one to not lose sight of currently is:

The wealth transfer is projected to be $12-18 trillion in inter-generational wealth transfer over the next twelve years, note the USA GDP is $12 Trillion. By 2053, some 130 trillion will have moved from one generation to another. This generation is tech savvy hot and smart; are we ready for them?

Here are some of the points gathered from research and our own experiences in supporting our FSI Clients.

1. The financial crisis has caused banks to re-assess their business fundamentals like profitability and client relationship management to improve client retention and cross selling capabilities.

2. Banks are renewing their focus on the fundamental assets of customer, staff and capital rather than product innovation for long-term growth to become well managed.

3. Banks are increasing risk transparency to help reduce operational risk and comply with corporate governance regulations and standards.

4. Banks are focusing on staff efficiency to make them more aligned with the bank’s risk and profit strategy by enhancing their IT solutions.

5.Banks are moving from a product-centric approach to a client-centric approach with a 360-degree understanding of their clients to better manage and maintain client relationships.

6.Banks are deploying client profitability analytics to enhance performance by analyzing profitability at multiple levels.

7. Banks are seeking data reporting technology and proactive approaches to better manage clients and client portfolios.

8. Banks are trying to better leverage the best of existing infrastructures while adding new platforms for operational and cost efficiencies.

9. Banks are accelerating the use of algorithmic approaches to complex back-office tasks for increased automation and efficiency.

10. Banks are looking to do more with less by balancing cost reduction with process improvements using business process management and business activity monitoring.

11. Banks are investing in online banking and improve electronic trading infrastructure and mobile solutions are a high priority in getting read for Gen X and Y needs.

12. Banks are recognizing the need to create stronger customer experiences across all products and services in terms of integrated portfolios, simplified interface experiences with all channel touch points or improved design interfaces.

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