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Banking in 2021: Top 10 trends to watch

January 8, 2021

1. Go big and stay home

The 'winner takes all' phenomenon is now emerging in retail banking. As the big get bigger, 'too small to succeed' will replace 'too big to fail.'

2. The neo-normal

The best traditional banks and the best neobanks will win customers, while weaker incumbents and undifferentiated challengers will struggle.

3. Twilight of the banking apps

As banking completes its migration from street corners to screens, competition in retail and commercial will heat up—and squeeze out standalone apps.

4. Radical transparency

2021 will be tough for traditional retail strategies. Some banks will lean into radically transparent products to create a more compelling pitch.

5. Getting the credit

As COVID-linked losses work their way through P&Ls, smart credit quality management utilizing micro-segmentation will become a winning differentiator.

6. Cash is not king

The pandemic will slingshot digital payments in countries racing to become cashless. But in most markets, nixing cash will remain a long-term project.

7. A green inflexion point

2021 will be an inflection point in sustainable lending, as central banks and regulators recognize the macroeconomic consequences of climate change.

8. The uncertain world of US regulations

The impact of the US elections on our industry will become clear in 2021. But many changes remain uncertain, like the fate of Open Banking.

9. The rise of the digital regulator

If 2020 was an accelerator for the banking industry, 2021 could be similar for regulators. Expect a new type of regulator to rise.

10. No more fluffy clouds

Cloud computing is becoming a spectrum—a sky filled with cirrus rather than isolated cumulus clouds. Siloed thinking will become more dangerous.

What will a post-COVID world look like for the retail and commercial banking industry?

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