Retail banks in the United States face a whole host of challenges including customer confidence, regulatory compliance, attracting new customers, cybersecurity, utilizing big data and mastering social media, to name a few.
Given these challenges, it’s not so surprising that retail banks would align their priorities with these challenges. According to an article by The Financial Brand, retail banks’ top priorities include:
- using big data, AI and advanced analytics
- developing a customer-centric business model
- optimizing distribution
- simplifying business and operating models
- obtaining an information advantage
- enabling innovation
- managing risk, regulations and capital
While these goals are incredibly important for retail banks to achieve in order to stay relevant and competitive, achieving these goals – even just one – is a challenge.
Here are some ideas to consider.
Getting started: Three areas to focus on
While it would be ideal to achieve all eight of these goals, it’s not realistic to do that all at once. Instead, start by focusing on three key areas first:
- Big data and advanced analytics: Retail banks need to start doing more with the information they have which would, in turn, help attract new customers. This is why being able to successfully execute big data and advanced analytics is so important for retail banks. Consolidating customer data and gathering business insights will not only help lead to new customers but will also help retail banks better understand their customers more than ever before. This will ultimately lead to developing a more customer-centric business model as well as enabling innovation, other goals retail banks are looking to achieve.
- Simplify business and operating models: Banks are faced with the challenge of not only doing more with less but also doing so in a profitable way. There are thousands of areas that a bank can focus on saving money. Some of the obvious areas are commonly overlooked, however. Basic services like shredding, physical records management and imaging operations are all areas that, if streamline effectively, could yield a large dollar cost savings to the bank as well as overall process efficiencies.
- Make workspaces more efficient: The consolidation of banks branches coupled with the strategic opening of branches is a prime opportunity for banks to consolidate. An important part of this is cleaning out overall which needs to include secure disposition of paper as well as any IT assets that may hold sensitive information. Real estate moves need an efficient cost effective approach. Working with one partner that can handle the logistics of the disposition of IT assets, file storage moves, paper recycle and much more is critical in lessening the downtime of one location while spinning up a new one.
Transformation doesn’t have to be a struggle
The world is changing at extraordinary speeds and retail banks are not immune. However, this changing landscape means retail banks will have to put in the work to evolve with the times.
Although a challenge, transforming to be more customer-centric and innovative doesn’t have to be an agonizing process for retail banks. The above three areas are a great starting point and will help set your bank up for success.