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To be successful in 2020, traditional full-service banks must become more digital and customer-centric, build continuous innovation into their core business and deliver products to the mass market.
Tradition. Clinging to it can mean missed opportunities, while abandoning it too quickly can alienate high-value customers. To succeed in a changing banking landscape, traditional full-service banks must find the right pace of change while balancing what works in their current business models with new possibilities.
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Momentum, market share and institutional heritage distinguish traditional full-service banks. But new competitors and new market challenges are closing in. Traditional banks can successfully operate within their existing banking business model in 2020—high performers will become more agile and innovative in order to build customer trust at scale.
Traditional full-service banks must become more digital by 2020. Flexible, analytics-powered IT platforms that enable true digital banking will allow these banks to stay ahead in a changing market, responding to—even predicting—customer demands.
Being truly customer driven by changing front-office culture, reorienting the back office and shifting from a product-centered to a customer-centered mindset will be paramount. What’s more, an omnichannel presence will help banks meet customers where they are. In fact, traditional full-service banks will conduct significant portions of their business through digital channels by 2020, exploring banking mobility and social media.
The highest performing banks will build continuous innovation into their core by 2020. The entire organization must commit to banking innovation, redefining their role in the industry, remaining attuned to customers and the market, and taking the risks that only true business pioneers do.
Becoming large scale—delivering products to the mass market at lower margins—is another path to the future, as long as costs can be controlled with reduced product complexity or enabling technology.
By evolving operations, traditional full-service banks are well positioned to preserve and extend market share and realize higher levels of growth and profitability.
November 18, 2013
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