Accenture measures disruption across two dimensions: current disruption and susceptibility to future disruption. Our Disruptability Index analysis rated banking as being just above average (0.52 on a scale of 0 – 1) in terms of current disruption, although this is rising – it was 0.43 in 2011. It’s no surprise, then, that it’s expected to suffer more disruption in the years ahead. In fact, at about 0.67, it is second only to insurance out of the 18 industries analyzed.

Prior to COVID-19, the digital challenger banks were making significant advances in a number of important markets. However, rapid gains in customer numbers couldn’t hide the fact that most of these customers had a primary account with a traditional bank where they received their salary and kept most of their money. The gradual increase in trust in challenger banks was abruptly halted by the pandemic, which caused customers to retreat to the perceived safety of the more familiar brands. At the same time, traditional banks were forced to digitize rapidly, narrowing the gap between the service levels of the innovative newcomers and their more conservative rivals. The net result is that established banks are better equipped than ever to counter the threat of the digital start-ups.

The advent of ambient banking is a watershed moment for the banking industry. It describes the incorporation of financial services into the offerings of companies that are not, primarily, financial services providers. Until now, a customer who bought a car might have obtained a loan from a bank in a transaction that was linked to but distinct from the purchase of the car. With ambient banking, the financial aspects are a seamless, frictionless part of the primary transaction and the bank is usually invisible to the customer. The significance is that by conceding ownership of the customer relationship, banks also allow revenue and market share to shift out of the banking industry to large, strongly branded players – most of them bigtech platforms – in a variety of other industries.

AI is already widely used and new applications are continually being tested. In many banks it serves mainly to relieve workers of administrative tasks, improving both the accuracy and efficiency of routine processes and allowing the workers to spend more time on tasks that are complicated and require judgment and imagination. Increasingly, however, AI is being used also to improve the customer experience. By analyzing vast stores of data and converting insights into relevant actions, it enables banks to engage with, advise, assist and sell to customers in a much more personalized way. At a time when COVID-19 is isolating customers from their banks, AI is helping to bring them closer by facilitating more empathetic and meaningful engagements.