Fincog's 'Banking for Tomorrow' outlines the future of banks

22 September 2022 3 min. read

Fincog, a consultancy for the financial services sector, has released a new report on the future of the banking industry, providing in-depth analysis of the key trends disrupting the scene, and how banks can emerge stronger and better.

The report, titled ‘Banking for Tomorrow’, outlines trends and dynamics across the financial sector – from digital disruption, growing competition and evolving customer needs, to environment, social and governance, regulation and open finance – and the impact these are expected to have on the industry.

The report concludes that a mixture of events – both in the external as well as internal – will form a perfect storm for change in the coming years. “Those banks that will succeed in navigating the disruption await a bright future,” said Jeroen de Bel, founder of Fincog and lead author of the report.

The report highlights how banks currently find themselves in rough waters. De Bel: “Banks struggle to generate a sustainable return on capital and keep up with new competitors. Most find themselves in difficulty due to legacy organisations and systems. They struggle to keep up with evolving customer experience and to achieve healthy financial returns. And they struggle with making the required transformation.”

While banks have long had the luxury to thrive with incumbent models, this time round they won’t be able to “escape the storm.” De Bel: “Banks need to keep up with the market to remain competitive. Changes to be introduced are no longer actions for the future, but should be tackled promptly, given the time required to make such transformations. Weaker players may soon reach a tipping point whereby they are too far behind.”

The seven components of the future bank
To become future-proof, banks should transform all parts of their organisation – and strategy – to be fully geared towards serving the client of the future. Doing so will, according to a methodology developed by Fincog, require progress across seven critical components:

Seven components for building the Bank of TomorrowCustomer Centric Organisation
Moving away from product siloes towards an operating model led by customer-journeys.

Technological Competency
Maintaining a modern, clean technology stack with unified access that delivers tailored customer experience.

Data Analytics
Enabling real-time aggregation and universal access with a decentralised approach to data production and consumption.

Digital Leadership
Embracing digital, starting at the top with a clear vision and then down through the organisation.

New Ways of Working
Redesigning processes with the customer journey in mind coupled with a new, agile way of working.

Embedded Sustainability
Embedding ESG across the organisation by defining clear targets and translating them into the business.

Focused Organisation
Focusing on the core business and competencies, while leveraging the capabilities of specialised third-party providers.

For those banks that succeed in making the transition to a future-proof model, the results will be fulfilling. “While it may be challenging (or even daunting), those that can navigate the disruption await a bright future. Meanwhile, others that fall too far behind will end up out of business or be acquired by counterparts.”

For the sector as a whole, the sector’s change is predicted to be one for the better. “The sector can emerge stronger. Customer experience will be improved, financial services will be more cost efficient and robust, and ESG and green practices will be deeply embedded within the ecosystem,” concluded De Bel.