Retail banks continue to grapple with the challenges of digitization, attempting to efficiently manage and evolve a variety of channels, reach people in a broad range of demographics, and invest in emerging technologies to stay ahead of an ever-increasingly competitive marketplace. Many retail banks have invested in their “plumbing”- implementing digital technologies to deliver the products, services and experiences their customers demand - but many are still running their businesses just as they did before. As a result, they are not enjoying the business results promised by digitization. New interfaces and millions of dollars spent have not met their digital transformation expectations, causing many to wonder whether the investment was in vain.

To gain a better understanding of the challenges our retail banking clients face, CGI leaders met face-to-face with 124 retail banking business and technology executives in 2019 for in-depth discussions on their trends and priorities. We summarize the findings and insights from these discussions in the CGI Client Global Insights retail banking report. In this blog, I cover some key highlights.

Balancing digital, regulatory and legacy needs

The three top trends cited by the client executives we interviewed include increasing customer adoption of digital as a primary channel, followed by mounting regulatory reform and the strain of digital transformation on legacy infrastructure. Interestingly, customer digital adoption rose significantly from fifth place in 2018 to first place in 2019, displacing mounting regulatory reform as banks look to please customers and compete with digital-only banks.

We believe these trends when combined reflect a desire among executives to drive customers to more “always-on” and cost-effective channels while also complying with increasing regulatory requirements, which could potentially restrict service through a particular channel based on a customer’s location. Further, with the passing of new regulations, such as the General Data Protection Regulation (GDPR) and the revised Payment Services Directive (PSD2), retail banks are modernizing their aging infrastructure to handle new and more complex requirements, along with addressing the demands of digital transformation projects.

Although the cost and complexity of large modernization projects poses a major challenge for retail banks, successful banks are pursuing modernization in parallel with digitization through an end-to-end strategy that takes into account cost-saving approaches such as managed services and software-as-a-service solutions.

Driving a better customer experience and agile IT delivery

Improving the end-to-end customer experience is the top business priority cited by retail banking executives, followed by accelerating digital customer-facing transformation programs and protecting the bank and its customers. The logic behind this order is straightforward; improving the end-to-end customer experience will help retain customers and drive revenue growth, while accelerating digital transformation will make it easier for retail banks to improve the customer experience through new channels and offerings. At the same time, protection remains a key priority due to the importance of trust to a bank’s business.

In terms of IT priorities, driving agile, faster IT delivery is the number one cited priority, followed by safeguarding the bank through investment in regulatory compliance and cybersecurity and delivering customer-facing transformation. Agility and speed reflect the concern of IT in aligning closely with the business to deliver more innovation and efficiencies, while protection is important for automation and data projects, which help to improve margins as well as preserve customer trust, especially when it comes to analyzing customer data. Interestingly, while driving customer-facing transformation was a top priority in 2018, it declined to third in 2019.

Our 2019 CGI Client Global Insights report for retail banks covers many other key topics, including the digital maturity of retail banks, as well as their cloud usage, IT and innovation spending, and progress toward becoming an IT leader in their industry. We also offer a global industry report, along with reports that cover various other sectors. I invite you to request a free copy of our retail banking report and to contact me for further discussion.

About this author

Picture of Andy Schmidt

Andy Schmidt

Vice President & Global Industry Lead for Banking

Andy Schmidt is a former banker and industry analyst who currently helps drive CGI’s strategy across our financial services vertical. Andy has more than 25 years of financial services experience as a banker at Bank of America, a consultant at Ernst & Young and an ...

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