Top Challenges: Competition x Change

The banking industry has faced several challenges that have required innovation and adaptation to overcome in 2022. Here is a look into what leading executives are sharing their top obstacles are: 

Competition 

A major challenge for traditional banks is the increasing competition from FinTech organizations. These companies are using technology to offer customers a more convenient and user-friendly experience, which is attracting many consumers away from traditional banks. To compete, traditional banks will need to invest in their own technology and digital services to provide a similar level of convenience and user-friendliness. 

The growing demand for sustainable and socially responsible banking

With increased awareness of environmental and social issues, consumers are becoming more selective in who they bank and invest their money with. That is why many institutions are offering more sustainable and socially responsible products and services.  

The ongoing threat of cyber-attacks

As the banking industry becomes more reliant on technology, it is also becoming more vulnerable to cyber-attacks. Banks will need to invest in robust cybersecurity measures to protect their customers’ information and their own operations from these attacks to thrive in the global economy. 

Community-Focused Marketing at Scale

The opening keynote of the GDS Banking Innovation Summit was Francesco Lagutaine, Chief Marketing, Communications and Digital Officer at M&T Bank. He spoke about the rise and time for community-focused marketing at scale. 

“People are looking much closer to home, at what they can control, and they’re looking at what’s making a real difference to their day-to-day lives. And so, we see that 55% of customers say they’re more emotionally connected to businesses in their area.”  

“Customers want to see businesses have a presence in their communities.”
-Francesco Lagutaine, M&T Bank

He also shared that 75% of customers believe companies who want to do business in their communities have a duty, and an obligation, to take action and share their wealth in the communities they participate in.  

“Even in our own business, when we look at our own data, we see that in banking 51% of customers say that local propositions create a value proposition that is unique and different. And in an industry like banking, where services are becoming – at their core – truly commoditized, this ability to create something that is unique and different is absolutely key.” 

Francesco believes the challenge that community banks have today is that while customers appreciate the community focus, the way the industry is developing creates a big challenge. “Customers expect the convenience of digital services. The component of banking that is done on these devices is a significant part of the experience of banking today and customers expect to be able to bank on these devices.”  

Make it Personal: Takeaways from the Personal Banking Panel

Financial Service (FS) brands now invest in features to shape experiences around the customers’ individual needs. Personal finance management tools have gained the spotlight for a good reason. More than ever, people expect to know more about their finances in this digital-first space. 

During a panel discussion on personal banking at the GDS Banking Innovation Summit we spoke with several industry leading experts including, Samuel Best, Vice President, Voice of the Customer at GM Financial. He said when you think about digital transformation, often at times it can feel like “turning a cruise ship, which doesn’t happen overnight.” 

“So how do we start off smaller and know the customer impact, or the operational savings of these initiatives? The big value is getting folks committed, buy, and collaborate. Get some lessons learned and then move forward. So, if you don’t have a culture of experimentation, I would encourage you to start there.” 

During the panel, Tom Martin, CEO at Glance Networks shared, it’s all about the customers.   

“I think we’re all crazy about customers. We love customers, and we need to think about them less as guinea pigs. We need to recognize that when we get things wrong, we’re still giving customers the ability to get out and actually speak with a real person.” 

Personalization has always been a critical part of the FS experience. After all, customers need to trust the brand with their hard-earned money personally. In the past, trust was achieved through human interactions and personal relationships.  

However, as the FS industry has become more automated, providing the same level of personalization has become more challenging, creating a significant opportunity for companies leading the way forward. 

Open Banking & Beyond: Building the Future of Financial Services

During the closing keynote at the GDS Banking Innovation Summit, we heard from Ryan Beaudry, Senior Vice President, Open Banking Product and Engineering, North America at Mastercard. He spoke about open banking and building the future of FS. 

 “It’s really remarkable when we see some of the advancements and how quickly the pace of innovation is changing to unlock new opportunities. We have to create innovative experiences that change the way that we interact, change the way that we travel, and change the way that – from a business perspective – we look at consumer engagement,” he shared. 

“And today what we see is that we’re on the crest of another equally profound technology change when it comes to the use of consumer permission data through open banking. So, as we look at this space and as we look at the evolution of what’s happening today, the rise of technology will empower both consumers and businesses to benefit from their financial data.” 

Overall, the challenges facing the banking industry are significant. However, they also present opportunities for innovation and growth. By adapting to changing consumer demands, investing in technology and cybersecurity, and implementing sustainable practices, banks can continue to thrive and play a vital role in the global economy. 

GDS Summits are tailored 3-day virtual event conferences that bring together business leaders and solution providers to accelerate sales cycles, industry conversations and outcomes. Regarding the NG Banking Summit 80% of Solution Providers said they would be interested in sponsoring future events and that same 80% agreed that in this ‘new normal’, GDS Digital Summits worked well and met or exceeded their expectations.