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Banking 2020: Capturing emerging opportunities

As challenging as the current operating environment is, we believe the banking sector in 2020 is a land of opportunity.


Banks that can match the agility and innovation potential of other industries could consistently reap pre-tax return on equity (RoE) levels as high as 18 to 25 percent by 2020. That represents a huge jump over the average 11 percent Pre-Tax RoE the largest banks in North America managed at the end of 2012.

To realize success, banks must:

  • Shift their operating philosophy from a product-oriented organization to a customer-driven organization

  • Embrace and integrate new technologies, channels and strategies


Five years after the global financial crisis, many North American banks are struggling to generate sustainable organic growth and return to pre-crisis profit levels. A number of emerging trends. Including digital technology and rapid-fire changes in customer preferences, threaten banks that limit themselves to distributing products and services through physical channels—particularly branches.

Given the scale of these disruptions, our analysis shows that full-service banks could lose about 35 percent of their market share by 2020. Who gains this market share? Digitally oriented disruptors that are more agile and innovative. Some of these will be new entrants to the market, and others will be today’s full-service banks that streamline operations to better meet consumer needs.

However, as challenging as the current operating environment is, we believe the banking sector in 2020 is a land of opportunity.


No matter how banks undergo the journey to sustainable competitive advantage, or what business model banks choose to pursue, they should start to re-rig their ships for success today.

In choosing the right business model, there is no one-size-fits-all solution. The right approach may be a custom solution in which different business models are adopted for different business units, depending on the market requirements within that sector.

Banks can begin the journey to success in 2020 by implementing three building blocks to sustainable competitive advantage:

  1. Optimization and Simplification. Be as efficient and effective as possible in current structure.

  2. Agility. Be able to seize the opportunities in times of change.

  3. Continuous Innovation. Have the ideas, vision and leadership to proactively stay ahead of the market

To capture the emerging opportunities in this era of convergent disruptive forces, traditional full-service banks must shift their operating philosophy from a product-oriented organization to a customer-driven organization able to engage with customers anywhere, anytime on their terms. Most fundamentally, they must embrace and integrate new technologies, channels and strategies.


Banking 2020: Lighting the Way to New Opportunities
From technology to customer expectations, the market has changed considerably in the five years since the global financial crisis and will continue to evolve in the years to come. To succeed in this environment, banks must either enhance their existing business models or adopt one of three new business models.

Watch this Accenture Banking 2020 video to learn more about three building blocks that will help light the way to a sustainable competitive advantage and higher return on equity (ROE).

How Can Banks Thrive in 2020?

Building Blocks for Success: How Can Banks Thrive in 2020?

Sustainable competitive advantage. Banks can capture it by leveraging three building blocks—optimization and simplification, agility and continuous innovation.

Agility: How Can Banks Seize Opportunities in Times of Change?

Agility. It is about restructuring banks away from current constraints to be more customer-centric and nimble in 2020 and beyond. It is about making change an asset rather than a liability.

Do Full-Service Banks Need to Break With Tradition for Success?

Tradition. Clinging to it can mean missed opportunities, while abandoning it too quickly can alienate high-value customers. Banks must become more digital and customer-centric.

Charting the Route to Opportunity in 2020

To be successful in 2020, today’s banks must undergo a business evolution toward one of three new models—the digital, full-service bank, the niche digital provider or the big box bank. Convergent disruption is changing banking—and today’s institutions must find tomorrow’s true north. Most traditional full-service banks will retain this business model, with different degrees of success, while others will become digital full-service banks, big box banks or niche digital providers. This banking business model evolution will be about action—not absolutes—because every bank has its own path ahead. The rationale and preference for particular business models will vary, by bank and even by business units at the same bank. Banks must start building the groundwork for 2020. Success means proactively investing in the business, becoming customer-driven and embracing banking in the digital age.



What New Competitors Will Join in 2020?

Banking business models.

What they are today is not what they will be tomorrow. Three new models—the niche digital provider, the digital, full-service bank and the big box bank—will have the biggest effect on traditional full-service banks in 2020. Banks have exciting opportunities to protect and build their business. They can either evolve existing banking business models to be competitive or explore three new models for future success. The first new model is the niche digital provider, which is highly agile and highly specialized. These banks have a flexible infrastructure and pioneer banking social media and mobility banking. They will likely result from new entrants or innovative joint ventures between traditional players and technology providers. Whether rooted in existing institutions or new entrants, digital, full-service banks will also emerge as truly digital businesses. They will offer a range of products and next-generation digital customer experiences without heavy reliance on physical distribution channels. Finally, big box banks join the 2020 banking landscape offering commodity products to mass-market customers. Their customer appeal lies in broad product offerings and value pricing. Each banking business model has the potential to be highly disruptive. The real question for traditional full-service banks is this. Should they alter their path, or choose an entirely new one? Either way, opportunity abounds.