Strategic anxiety in banking
Strategic anxiety in banking
Planning for future growth in the banking industry, which is rapidly digitizing, is complicated and difficult work. Meeting this challenge through strategic planning has, in our view, produced a very real sense of anxiety among a host of bank management committees and boards. Deciding how to organize a banking strategy – where to start, where to focus, and deliver results – is also proving to be vexing, for at least a portion of the industry.
Top three causes of strategic anxiety in banking:
- Customer experience and trust
There is no let-up in the increasing demands of banking customers. If banks don’t make their customer’s experiences a priority with innovative products, those customers will move on quickly. - Pressure that fintech companies are having on the industry
Fintechs will win-over traditional banking customers if bank management teams doesn’t understand their business gaps and where fintechs can fit in to support those gaps. - Regulatory uncertainty in the banking industry
With the new administration, regulatory uncertainty will remain. We explore how “regtech” is influencing banking regulatory compliance.
Action steps to manage strategic anxiety in banking:
- Leverage customer behavioral data
Understanding banking customers and their behaviors will help bank management teams create and deliver the products customers want and expect. Cognitive intelligence and artificial intelligence are tools teams can use to leverage the vast amount of data banks traditionally carry in silos. - Expand to a platform business model to reach more banking customers
By taking advantage of the network effects of a platform business model, banks can more easily expand their product base and reach more customers. - Engage in co-opetition with fintechs
“You could define co-opetition as a shift from a model of exclusivity to one of inclusivity,’’ says David Pessah, a director at KPMG’s Innovation Lab, specializing in financial services. “And, that’s not only as it relates to products and services. It’s also about a bank’s ability to work with other participants in the banking ecosystem. It’s all about how interconnected the bank can become, and how it can personalize the banking experience.’’
Download strategic anxiety in banking for detail on these action steps.
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