What the future of retail banking looks like

  • Retail banks are making inroads in the Banking-as-a-Service (BaaS) space.
  • Many US execs working at financial services, fintech, and technology companies believe BaaS has the potential to transform payments.
  • Do you work in the Banking industry? Get business insights on the latest tech innovations, market trends, and your competitors with data-driven research.

Technology geared toward improving retail banks’ operational efficiency is positively impacting the market. According to Insider Intelligence, 39% of retail banking executives say that reducing costs is where technology has the greatest impact, compared to only 24% who say it’s improving customer experience.

Retail banks are also launching platforms in the Banking-as-a-Service (BaaS) space to remain competitive. For example, UK neobank Starling used to exclusively offer business-to-consumer (B2C) retail banking services; but, after launching a BaaS platform, Starling diversified its product and revenue streams, helping it remain relevant in the neobank space.

BaaS has the potential to significantly transform the payments space. In fact, 41% of US executives in financial services, fintech, and technology companies said so, per an August 2020 data from Wex.

Meanwhile, mobile banking has solidified its place as a must-have feature for financial institutions to remain competitive, particularly among digitally-savvy millennials and Gen Zers. In fact, over 45% of respondents to Insider Intelligence’s fourth annual Mobile Banking Competitive Edge Study identify mobile as a top-three factor that determines their choice of FI.

More to Learn

Interested in learning more about the banking space? Here are some related reports that might interest you: 

  1. The Rise of Banking-as-a-Service, which looks at five major BaaS providers, ranging from fintechs to 20-year-old legacy providers that we think represent a good cross-section of approaches to offering BaaS. 
  2. AI in Banking, which identifies the most meaningful AI applications across banks’ front and middle offices. 
  3. The Global Neobanks Report, which explores how the neobank market has grown rapidly, and what’s in store as the industry pivots from hyper-growth to sustainability. Learn more about the financial services industry.

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