OPEN BANKING GOES MAINSTREAM
This year, attitudes toward Open Banking will start to separate those who want to differentiate themselves by being good trading partners from those still hunkering down behind trade barriers, seeking to harvest diminishing profits from old business models.
PUT IT IN THE CLOUD
There is already plenty of evidence that the cloud can be as secure as any private data center. In 2018, the conversation around cloud will shift from “if” to “how and when.”
FEWER HEART TRANSPLANTS, MORE BYPASSES
Traditional mainframe core banking applications are not well suited to the digital economy. Rather than ripping out and replacing decades-old technology, look for banks to “freeze and wrap”—using existing core systems as books of record, while moving customer engagement and analytics to the cloud.
BECOME TRULY DIGITAL OR GET OUT
Customers today expect to be able to sign up for new banking services online. In 2018, a failure to provide true digital origination will start to move from a disappointment to an existential threat.
MAN OR MACHINE?
A big threat for banks this year will be synthetic identity fraud. Banks will need to get better at sorting real customers from fake ones, without undermining the benefits of a great digital customer experience.
DIGITAL FIRST WILL MEAN FEWER BANK BRANCHES
Digital banking will continue to shrink the number of global bank branches. The challenge for banks is to quickly get to their right mix of branches and digital offerings to be when and where customers want to bank.
FINTECHS ARE FRIENDS
Fintech lit an innovation flame under incumbent banks and accelerated their evolution. 2018 will likely see more fintech acquisitions as large players buy rather than build.
U.S. BANKING MAKES A COMEBACK
With signs of regulatory relief, lower taxes and rising interest rates nationally, we could see large U.S. banks starting to flex their investment and competitive muscles in a way that we haven’t seen for a decade.
ROBOTS GET TO KNOW YOU
Artificial intelligence may start to provide contextual, holistic advice that is truly in the customers’ best interest, requiring a level of radical transparency unfamiliar to most banks. If banks fail to provide it, someone else will pick up the mantle.
BITCOIN COULD BE THE NEXT TULIP CRAZE
Like the roller-coasting value of a Dutch tulip bulb in the 15th century, Bitcoin is unlikely to defy economic gravity over the medium term. What will continue to matter is the evolution of the underlying distributed ledger technology.