What will the bank look like in 10 years?


By Manoj Mistry, Managing Director, IBOS Association

IBM President Thomas J Watson once predicted, “I think there’s a global market for about five computers. Besides missing the word “billion,” he was spot on. With this caveat in mind, some predictions about the bank ten years from now are given below.

So what changes can we expect by 2032? Some major themes can be predicted with reasonable certainty. The banks of the future will continue to embrace emerging technologies, they will remain flexible in adopting evolving business models, and they will put customers at the center of all stages of their strategy.

Over the past decade, customer behavior has shifted towards a more digital consumption of banking services. Expect this trend to continue. In response, the digitization of banks will be an integral part of all aspects of their strategic offer. Its impact will be positive for their customers, who will benefit from better and ever more practical services.

In turn, customer demand for convenience will inevitably increase. And much like TV’s big switch from analogue to digital a decade ago, any bank that doesn’t fully advance on digitalization over the next decade won’t survive.

To retain customers and win new ones in the brave new world of 2032, banks are already recognizing that it will become an increasingly competitive landscape, where customer loyalty is increasingly difficult to maintain.

As part of their offering, AI and automation will continue to be an integral part of every bank’s strategy. Its core will be the concept of semi-autonomous banking which has been described as algorithm-based services that make financial decisions or act on behalf of a customer.

Customers are increasingly tech-savvy and are expected to become even more so over the next decade. For these semi-autonomous decisions to be made on their behalf, customer trust in their bank will become even more imperative to maintain.

At all ages, this will continue to be a challenge with some older clients who may be more resistant to the idea of ​​autonomous decisions being made without their direct input. Nevertheless, more and more of them are already trusting the algorithms that underpin them.

At the other end of the age spectrum, there will be even more effort to attract new customers. A lot of it comes down to one basic principle: know your customer. Banks are already targeting millennials, most of whom are digital natives, through hyper-connectivity and relationship building rather than sheer cost or convenience. Expect banks to know a lot more about each customer in the future, which will lead to more bespoke products and services being offered through closer virtual relationships.

Perhaps the biggest challenge will come from Gen Z – those now 25 and under. Extensive research indicates that these consumers tend to have very short attention spans: if it takes more than 280 characters to explain something, you risk losing their interest.

Knowing their preferences helps. How banks choose technologies and customize services for this key target group will depend on knowing exactly what they want: using websites and apps that predict needs and preferences, they generally prefer predictive personalized services.

Banks can therefore be expected to focus on personalization that combines algorithms and predictive analysis. Banks will anticipate their future banking needs through predictive analytics and the use of services to generate stand-alone predictive product offerings. They will also automate and pre-fill data, which will save time when signing up for additional products and services.

A decade from now, banks’ approach to millennials, GenZ and the generation after them may coalesce around the concept of connecting with the customer on an emotional level. By definition, this goes beyond simply deploying the latest technologies.

For these future customers, the digital world will not be primarily about access to information and utility, but rather about entertainment and emotional gratification. Today’s banking apps are utilitarian tools that do not yet create a meaningful emotional connection with the user. As can already be seen with GenZ, banks are being forced to design digital banking apps that inspire a deeper emotional connection with users. Expect this trend to continue.

Banks will keep adding features that will impress their customers – until the next one comes along. Banks will try to connect with their customers’ lifestyle by incorporating aspects of their non-financial lifestyle. It’s unclear exactly how banks might reinvent themselves to achieve this, but many seem determined to do so.

A world full of increasingly human avatars also seems entirely possible. The technology deployed in ABBA’s new virtual concert has stunned critics with its human qualities. While future banks may not sing for their customers, the avatars they use will become both more sophisticated and more responsive to customer needs.

But as realistic as avatars become, a human touch will still be needed as and when needed, so the banks of the future will also continue to have a human face.


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