MAKING industry

experts

BANKING 10X banking

predictions

BETTER IN 2022 years of

experience
20+ PREDICTIONS FOR BANKS IN 2022 FOREWORD

Contents ANTONY JENKINS

Founder, Chair and CEO

03 | Hyper-personalization >

It’s all systems go for hyper-personalization as demand soars for Netflix-style marketing.
Lucy Heavens, Chief Marketing Officer, uncovers why banks who move slowly will miss out,
and why omni-channel is the only way forward.
Buckle in for 2022!
Turbulent times lie ahead, as banks race to offload their legacy technology and finally
05 | Product Engineering > start to deliver on some of that long-awaited digital transformation.

Spending billions patching up legacy technology is no investment. Mark Holt, Chief Product On the journey, five of our leading experts anticipate that incumbent banks will faction off into two
and Engineering Officer, shares his predictions around the aging tech workforce, why groups. Those that take the plunge and adopt end-to-end cloud technology, and those who fade
decision-making will be key, and why some banks will be priced out the market. into irrelevance. And if you think that sounds brutal, wait until you read the predictions!

These five experts - who have gained an extraordinary 107 years of experience between them –
have identified five major areas, ripe for 2022 disruption. Across all themes, there’s a blend of new
07 | Compliance > tech and old values. No matter how far into the future we look, excellent customer service will
always come out on top.
While the world becomes more seamless, there’s one area where Victoria Martin, Head of
Compliance and Regulatory Affairs, expects a lot more friction. Find out more about the FCA’s For myself, and the work we are doing at 10x, 2022 is set to be a busy year. We’re powering full
focus on financial vulnerability, mortgage prisoners, and Buy Now Pay Later platforms in her steam ahead with our clients and partners to make banking 10 times better for millions of customers.
action-packed predictions.
But enough about us! Get stuck in to these expert predictions, and see how the future of banking
could play out.

09 | Product Design > Yours,

Antony Jenkins, CBE
Love a good sci-fi? Ed Thomas, Head of Product Design, shares his mind-bending predictions
for the future of product design. We may not see all of these “intelligent-baked-in” banking
products over the next twelve months, but we’ll certainly get a glimpse of what’s to come.

11 | Banking in 2022 >

Leda Glyptis, Chief Client Officer, packs a punch with her hard-hitting predictions about what
banks need to do to get ahead in 2022. And the first step might be easier and harder than you’d
ever imagine. Leda’s loaded predictions are sure to keep you on your toes, well into the next year.

02 | Making banking 10x better in 2022

MAKING HYPER-PERSONALISATION 10x BETTER

Banks that don’t Prediction 1:

Hyper-personalization takes over the world

hyper-personalize This is a no-brainer. Globally, hyper-personalization software is expected to explode from $6.7 million
in 2020 to $1.6 billion in 2025. The whole world is moving in the same direction. Well... except for one

will miss out LUCY HEAVENS

Chief Marketing Officer
industry. A shocking 94% of financial services are still not offering hyper-personalization. In the past,
this may have been somewhat understandable as banks found themselves shackled by both regulators
and technology alike when it comes to data-sharing.

But in the post-COVID age of open finance and embedded finance, the regulation excuse is running
thin. All eyes have turned to the flailing technology – including customers. They may not care to know
When it comes to hyper-personalization, everyone already knows what banks should the reasons behind the impersonal product shelves, but they will feel the frustration of having to work
be doing. Customers want the Netflix effect; they want exceptionally relevant product twice as hard to get a product that barely suits them.
suggestions in real-time.
It’s bad news for most banks who won’t be able to keep up. Unhappy customers will have no hesitation
And if they somehow don’t already feel it in the air, banking leaders will have surely read about hyper- switching over to hyper-personalized services, faster than you can say “open banking”.
personalization in research papers. In the words of a recent McKinsey document, “Harnessing the new
powers of data-driven marketing” is an “essential step for banks”… How much clearer can you be? Prediction 2:
Banks who employ outsiders into the marketing and tech teams
But how many banks will grab the digital bull by the horns and do it? will start seeing results
That’s the real question.
Over the past year, a quiet change has been brewing for forward-thinking banks. Headcount by
Looking to 2022 and beyond, a handful of strategic banks are likely to soar ahead with headcount, SaaS by SaaS, they’ve started to employ outsiders into traditionally-insider roles. No
hyper-personalization – winning back lost customers and quickly gaining new ones. longer new at the job, 2022 is the year when these outsiders gain confidence and start to make their
But a great many more will snooze and lose. mark. Some banks will start to look a lot more like their FinTech counterparts, and finally bite back
against the competition.

These newcomers are bringing new ways of creative thinking into the mix and perceiving IT risk
through a different lens. And it’s this blend of mindsets as well as machines that will help banks get
over the hump of legacy technology over the coming years.

They may not care to know the

reasons behind the impersonal
product shelves, but customers
will feel the frustration of having
to work twice as hard to get a
product that barely suits them.

03 | Making banking 10x better in 2022

Prediction 3:
Banks who combine data and channels will generate the best customer experiences Action plan: How can banks overcome the obstacles?

Ask a child to draw a typical banker and prepare to be insulted. Since the disastrous 2008 crisis hit So how can banks start taking advantage of hyper-personalization? There are three
our employment levels - and the Wolf of Wall Street hit our screens - financial services have taken a major obstacles to overcome: old technology, product-mindsets, and dwindling
reputational knock. 71% of millennials would rather go to the dentist than listen to what a bank has customer trust levels.
to say! In the blunt words of a recent Deloitte paper, “Banks are not trusted”.
To get started, banks need to set up a comprehensive data infrastructure. They need
But it wasn’t always like that. Bankers used to have real and regular conversations with their customers. to ensure the right personalized data is captured and most importantly, they need to
Hyper-personalization can help bring that back. Or, as the researchers at Deloitte put it, “Emotional have the right tech in place to store and share the data across other systems. At the
connection, through product design innovation, is one lever that banks should use to deliver hyper- heart of hyper-personalization is the ability to turn different sets of data into insights
personalzsation to customers and to gain their trust”. and actions, so that technology needs to be in place.

To do this successfully, the best banks must coordinate several channels working together. Firstly, the Secondly, banks who want to future-proof themselves need to stop looking at their
customer need is identified in the transactional data. This triggers a relevant product recommendation product shelf and start meeting customer needs. This means a mindset overhaul.
on a digital channel. From there, the customer can select self-service or opt to speak to someone in the Banks must start offering tailored products in real-time to increase financial
bank. When customers start to see Netflix-style service, the trust will begin to come back. As an added inclusion.
bonus, the World Retail Banking Report recently found a whopping 76% of customers want and expect
omni-channel experiences from their banks. Banks delivering on this demand should expect better This plays into the next challenge banks will need to surmount: trust. To overcome
feedback all-round. the trust problem, banks NEED to start giving customers what they need. And that
starts with analyzing the data.
Prediction 4:
Hyper-personalization as a force for good in 2022 This self-fulfilling triangle of customer data, customer focus, and customer trust is
pivotal for building relevant products and services. Not to mention keeping the bank
In a recent Personetics article, “financial peace” for customers was highlighted as one of the main happily in the black.
avenues for hyper-personalization in 2022. And the regulators are fully onboard. The FCA has hinted
that it will focus deeply on financial vulnerability in 2022. Many people need support to manage their
finances, and hyper-personalization is best-placed to offer that.

So, how could this work in practice? Take a long-term renter, for example. Data from the core banking
system will show how much rent the customer pays each month, and where they spend their time.
From there, leveraging technology, the bank could send a nudge tempting the customer with a relevant
mortgage, and the kind of property they could afford in that area. This would be fantastically helpful for
the customer, as well as a business boost for the bank.
Click to Tweet
Or, if you have a customer who struggles to save, by analyzing customer data, the bank can offer a How can banks take advantage of #hyperpersonalization?
personalized savings account with simple weekly direct debits or a change round-up option... There are 3 major obstacles to overcome: old tech,
The options are as unique and varied as the customer base. All this data and technology is already product-mindsets & dwindling customer trust levels.
available, it just needs to be combined to tackle financial literacy, inclusion, and more. Read more in the e-book https://bit.ly/3rYZvZV

#FinTech #CustomerExperience #Banking

04 | Making banking 10x better in 2022

MAKING PRODUCT ENGINEERING 10X BETTER

Will legacy technology

bankrupt financial MARK HOLT

services? Chief Product and

Engineering Officer
One bank I know had a bug in their system
and they had to find the developer who wrote
the code 27 years ago to fix the problem.
It’s a super-exciting time to be a product engineer! For the 90% of UK banks still
relying on legacy technology, it must be a daunting moment. Not only are legacy
platforms sucking up the IT budget, they’re also becoming defunct as the only
people who can fix them leave the workforce.

The Great Retirement of 2021 will surely leave its mark on the product engineering of financial services.
And banks are likely start to feeling the resource pinch in the coming 12 months.

As always, the best banks will be those who invest in the guts of the system and are already well on their
way to embracing public cloud platforms. The others will lag, and we’ll see a divergence start to form.

Prediction 1: Prediction 2:
The best banks will spend less on maintenance Consultants who can fix legacy technology will run out

Over the past decades, the IT budget for banks has become colossal, with some departments employing Another ongoing headache for banks today is attracting and retaining IT talent. Finding the right people
more than 6,000 professionals! But shockingly, as little as just 5% of IT budgets goes towards innovation. for the job is hard. And that is exacerbated when you’re dealing with legacy technology.
A report by Financial News found a whopping 80% of IT budgets gets sucked up by maintenance. And
the whole system is starting to unravel. As more and more people are needed to reinforce struggling IT Astonishingly, the systems are so mind-numbingly ancient that the people who remember how to fix
systems, whole banks are spiralling backwards. these retro systems are retired! One bank I know had a bug in their system and they had to find the
developer who wrote the code 27 years ago to fix the problem. When you need to keep a developer
By feeding the monster and sustaining a system that impedes agility, banks are fast losing their ability to around for 27 years, that’s quite scary!
react and create new products. Not only is it alienating customers, but it’s also sucking up much-needed
revenue. Banks are spending upwards of $10 billion each year artificially preserving tech that cannot But this bank is not alone, far from it! For many, the COVID-19 pandemic was a retirement trigger.
handle the demands of the future. The mainframe platform is fully depreciated. Everyone has forgotten Pew Research found that nearly 30 million baby boomers left the workforce in 2020, and for many more
about the cost of buying it in the first place, but there are 50+ people crawling all over it, keeping it alive. it’s on the horizon. The last thing they want to do is pick up their briefcase again and stroll back into a
And every time banks try and make a change, it takes three times more experts than you thought it was bank for some massively complicated coding work… which (rightly) explains why retro coders are now
going to in the first place, and twice as long. So, costs just go up and up and up and up. Their product so expensive.
teams are no longer innovating on behalf of the customer, they’re managing a complicated IT project.
Exacerbating the problem, most graduates today have neither the skills or the inclination to fix a legacy
So, for my first prediction, I’m optimistic that many incumbent banks will finally trade in their old legacy system. Mainframes are a thing of the past. It’s like asking a Photoshop graduate to print out a Kodak
tech for a shiny new cloud-based model in 2022... After all, they can’t afford not to! film. After the “Great Retirement”, legacy technology coders will be extremely hard to come by… banks
may have to rely on professors dusting off their ‘80s textbooks and offering some niche retro coding
modules at university to get by.

05 | Making banking 10x better in 2022

Prediction 3:
Some banks will surge ahead with cloud-based cost savings
Word of caution: Stop talking and starting doing
The rise of the cloud is inevitable. It’s already happened. The best and most forward-looking
incumbents have already taken the plunge. And they are in the best position to overtake their change- The past couple of years marked a turning point. Banks are no longer deciding
adverse counterparts, especially when it comes to cutting costs and investing in innovation. the direction of financial technology. They are no longer blazing the path forward,
but rather traipsing behind in the aftermath, trying to keep up. Slow and cautious
There is, of course, a myriad of ways ways in which these cloud-friendly banks can save money. The decision-making from banking leaders needs to end. Painfully slow decisions that
most obvious will be finally cutting out the unbearable expenses associated with legacy technology. emerge through a process of osmosis over time are bringing the whole institution to
But another promotion-earning cost saving will be how the banking services can expand and contract a grinding halt.
in line with demand.
Back in the day, uprooting the bank’s software cost “billions”. And, to make matters
At the moment, incumbents need to always operate at the maximum. They must have Black Friday worse, the risk of something going wrong meant that the Chief Technology Officer
capacity even on the quietest days of January. This isn’t just a huge waste of resources, it’s also might never work in finance again. That fear still remains to this day, especially as
extremely expensive. Like buying an all-singing, all-dancing mobile phone tariff when you just need the post-2008 reputation of bankers still hangs awkwardly in the balance. But this is
a few minutes and some data for most of the year. The cloud is a game-changer because it scales up no longer the case today.
and down, with the need. It saves vast sums of money for banks, which means they can invest more in
innovation and make savings. This will be one of the major differentiators for banks in 2022 and beyond. The cost equation has changed fundamentally. Now it’s a tenth of what it used
It will separate the winners from the losers. to cost to put a platform live. And so, the career-ending consequences are so
disproportionately different than they used to be. It’s a much safer bet these days.
Prediction 4:
2022 will see the great channel shake-up As a final word of caution to banks, I’d say not to let your indecisiveness stop you
from progressing. Make a move or the game will continue without you.
Angela Strange famously said that one day, every company will be a FinTech. While we won’t get there
in 2022, we’re certainly heading in that direction.

Over the past year, we’ve seen the emergence of some really cool customer propositions in the banking
space, enabled by things like Banking-as-a-Service. These will fundamentally change the way people
think about financial products. Take our partnership with Westpac and Afterpay, for example. Who
could have imagined that a bank would partner up with such a diverse range of brands? It doesn’t just
future-proof their business, but it also brings in new revenue streams.

What’s more, Banking-as-a-Service opens the door to new customers. Banks will no longer have just
a couple of places where people need to make an effort to interact with them. But rather, they’ll be Click to Tweet
seamlessly integrated into a wide variety of tenant platforms. Probably most customers won’t even “One #bank had a bug in their system & they had to find
realise that they’re dealing with a bank at all. the developer who wrote the code 27 years ago to fix the problem”

With the rise of embedded finance, we’re already witnessing more and more commercial brands With 90% of banks still relying on legacy technology, how can
seamlessly become financial services providers – a trend I’m calling “the great channel shake-up”. This they win in 2022? Learn here https://bit.ly/3rYZvZV
is only set to increase in 2022.
#FinTech #Cloud #BankingTechnology

06 | Making banking 10x better in 2022

MAKING COMPLIANCE 10X BETTER

Prediction 2:
More risk for multi- FCA focus on vulnerable consumers

tenant platforms and

The humanitarian theme is likely to spread to other areas of finance too. Over the past years, the
lockdowns and dwindling employment levels have highlighted stark differences in wealth and living
conditions in the UK, with many vulnerable people finding themselves destitute. According to FCA

a regulatory focus VICTORIA MARTIN

Head of Compliance and
figures, around 24 million Brits fall into the “financially vulnerable” category – a shockingly high
proportion. So, now more than ever, customers need support from banks. Now, the regulators are on

on vulnerability
Regulatory Affairs the case.

In addition to BNPL, the FCA is also turning its attention to other forms of debt. There’s word of a
consultation next year, which is likely to emphasize and reinforce fair treatment for customers, and
add in some new requirements.

One particular group likely to receive a special focus from the FCA over 2022 and beyond is known
2022 will mark a regulatory turning-point for banks and FinTechs. Reversing the trend
as the “mortgage prisoners”. This is often somebody who has a negative equity or an interest-only
of seamlessly smooth finance, some products – such as Buy Now Pay Later – may be
mortgage. How the FCA plan to add in extra protection to help these homeowners is not yet clear. But
mandated to add a lot more friction. for banks offering these mortgages, there will almost certainly be a shake-up in the coming years.
Rather than putting out fires, banks may be required to pre-empt them – something banks have never
While others, such as those who encourage mortgage prisoners, may be outlawed altogether. Another been particularly good at.
fascinating development could the tax-incentivized rise of FinTech innovation that is likely to arise,
according to the Kalifa Review. Overall, the banks who surge ahead will be those who embrace The only way to meaningfully do this will be with technology. With a digital core banking engine
compliance at every stage of the journey, not just the review phase. And those who rocket forwards are connected to the relevant third parties, they’ve got that much-needed one customer picture.
likely to be those who swim with, not against, the new regulatory current. They can see all the risk elements for that customer, including the onboarding, risk profile, credit
scoring, and their actual behaviour. With this information, banks can intervene to offer more suitable
Prediction 1: products, while staying on the right side of the regulator. It hardly seems real, but worldwide a
More friction for Buy Now Pay Later jaw-dropping 68% of adults are excluded from credit because they don’t have the right history.
Unlocking this by using relevant and accessible data could change the world for the better.
Buy Now Pay Later (BNPL) falls between the cracks of UK regulation. Regulatory bandwidths include
things like charging interest, arranging credit for at least twelve months, exceeding £50 in value, and
continuing for more than 12 repayments. To date, BNPL has managed to dodge these qualifiers and
continue unregulated… but that could all be about to change as the FCA, the UK regulator, is very much
focused on financial difficulty.

One of the most interesting things that’s being debated today is creating more friction in the BNPL
journeys. For some time now, concerns have been raised from Citizens Advice and debt support charities
around how effortless it is for younger people to fall into deferred payment schemes. It’s just too easy to
apply for payment instalments for a piece of clothing and then forget all about it.
Overall, banks who surge ahead will
Pressure is mounting for these firms to slow down the process and give buyers more of an opportunity to
say no. So, in a bizarre flip of events, this is one area of embedded finance that is likely to become less
be those who embrace compliance
convenient in 2022. at every stage of the journey,
not just the review phase.

07 | Making banking 10x better in 2022

Prediction 3: Prediction 4:
The Kalifa Review makes its mark while open finance moves down under Overly ambitious tenants could pose risks for unprepared Banking-as-a-Service
providers
When it comes to open finance over the next years, the UK may move to a model that is more like
Australia. This means doing away with siloed financial product data and instead looking at the Embedded finance has exploded onto the online shopping scene at breakneck speeds. But let’s hope
customer holistically. It’s a truly customer-centric approach. This new outlook comes off the back of it’s not happening at break-bank speeds. Incumbents offering up their license need to be wary of
the highly-acclaimed and HM Treasury-commissioned Kalifa Review – a key document for banks tenants without rigorous compliance standards. Not all tenants are created with equal risk appetites,
and FinTechs alike. and this could be an issue for banks over 2022 and beyond. As banks embrace more multi-tenant
platforms, these varying risk appetites could prove to be problematic.
The 108-page report sets out a five-point plan for an upcoming “technological revolution”. Its aim?
To help the UK “retain its position as a global leader in financial services”. Steps include a policy and To manage this risk, the best banks and FinTechs will be the ones who embed compliance (as well as
regulation overhaul - as well as a drive for more skills, investment, international collaboration, and finance) into their culture. They need to be engaged at the earliest opportunity throughout the product
national connectivity. This review will change the landscape of banking and FinTech drastically over design and marketing, a practice known as “swim chairing”.
2022 and beyond.
Banks who fail to incorporate compliance from day one won’t keep up with the speed of the market over
So, what kinds of things could we be looking forward to? Well, one important outcome is likely to be 2022 and beyond.
a refreshingly smoother path for financial innovation. If you’re a new start-up, it’s virtually impossible
to navigate the rule book, unless you have some kind of specialist helping you. The Kalifa Review aims
to change that – especially as it recommends dishing out tax credit for technology research
and innovation.

Solution: Genuine collaboration is essential to get ahead

All roads point to partnership. Not in the flimsy “can I borrow your license?” sense of
the word. But a true and real partnership, where banks learn from tenants… And more
importantly, tenants learn from banks. It’s only by sharing the fullest expertise that
banks and tenants will be able to create products that truly meet customer needs.

At its heart, this involves banks and tenants sitting down together and listening to
each other, every step of the way. And the data they discuss – not to mention the
projects they implement - will come from technology. Finding the right core banking
partner will be crucial for firms looking to get ahead in 2022 and beyond.

To manage this risk, the best banks and

FinTechs will be the ones who embed compliance
(as well as finance) into their culture. Click to Tweet
“Banks who fail to incorporate #compliance from day one
won’t keep up with the speed of the market over 2022 & beyond.”

What does the regulatory landscape look like for #FinancialServices

firms in 2022? Find out in the e-book https://bit.ly/3rYZvZV

#FinTech #RegTech
08 | Making banking 10x better in 2022
MAKING PRODUCT ENGINEERING 10X BETTER

The customer
is always right ED THOMAS
Thinking in terms of the goal and not the
loan will mark a revolution in the way
Head of Product Design
products are designed in 2022 and beyond.
Secure homes, not mortgages. A safety
blanket, not a Cash ISA. A shot at a fulfilling
Customers rarely behave in the way the product was designed for – especially when and independent retirement, not a pension.
it comes to retail banking. In the UK, 14 million people use an unarranged overdraft
each year, picking up high fees, rather than opting for a loan or arranged facility as
banks intended.

75% of young people want to invest or are investing in the stock market – but less than 3% of the
population have a Stocks and Shares Individual Savings Account – a complete divergence from the
plan. If one thing is for certain, it’s that designers need to draw up their plans around the customer and
not the product. This will be a major theme for 2022. The best banks will adjust existing products so
that they can evolve around the customer. Products will begin to feel more like bespoke services as
hyper-personalization takes effect, and excitingly, they’ll start to have intelligence “baked in”.

Prediction 1: Prediction 2:
Customer focus makes a comeback The best banks will ditch product buckets

2022 will transform the most powerful machine of all… the banking mindset. Rather than relying One of the clear emerging themes for 2022 is the breaking down of silos. For decades, banks have
on an old suite of products, this year the best banks will push themselves to deeply understand categorized their business model into products. Saving and current accounts, mortgages, personal
the customer. As a recent study by McKinsey corroborates, “In a future-proof business model, the loans, debit cards, credit cards, and certificates of deposit generally have separate departments and
customer, not the product, is the focus”. entirely separate teams. From a profitability perspective, this makes cross-selling burdensome for
employees and customers alike. From a marketing and promotion standpoint, it opens a can of worms
This means that we, as designers, should be thinking about the actual goal of the customer. And it’s as customers could receive too many, too little, or completely inconsistent communications from the
NOT what the business thinks it is. Ultimately, nobody wants a loan. They want a car. And a loan is same bank. And from a design perspective, it limits the ability of the product dramatically. To get
what’s on offer to be able to achieve that. Thinking in terms of the goal and not the loan will mark a ahead, the best banks in 2022 need to reorganize their business model.
revolution in the way products are designed in 2022 and beyond. Secure homes, not mortgages.
A safety blanket, not a Cash ISA. A shot at a fulfilling and independent retirement, not a pension. To do this, banks will need to get over the hump of putting financial products into buckets – or
You get the picture. taxonomies – and creating a way that they can flow into one another. Building a design architecture to
achieve this is not complex. But getting a whole bank on board and moving the system over can be. The
So, what will this materially look like? And how will the product shelf evolve? The overall direction of best banks have already started this journey and will begin to enjoy the benefits in 2022.
travel seems to be a more service-based model.

09 | Making banking 10x better in 2022

Prediction 3: So, when can we expect these “living” products to hit our smartphones? Truly intelligent hyper-
Products will seem more like services personalized products won’t happen in 2022. But things will definitely start to go that way. We’re going
to see that general trend.
Over the next years, products will become so personalized and customizable that they’ll seem more
like a service. The technology to do this is already here, as cloud technology and open finance fast
become banking mainstream. What’s more, increasing numbers of incumbents now have the stomach
and the software to ditch their legacy tech. All signs point – very excitingly - to the real-time hyper-
personalization of products. A product so relevant that it feels bespoke – like a service.

Selling a hugely customizable product means customers enjoy the ultimate flexibility, allowing them to Conclusion: The banking subscription model will be
use a product in a way that suits them. Historically, the way that banks have thought about categorizing revolutionized
those products – for example, current accounts or savings accounts – don’t necessarily provide the
perfect fit for what customers need today. But by following a service-based model, banks can get back If you’re beginning to feel like you’re in a banking sci-fi novel, welcome to my world!
to their roots and work around customers’ true needs, rather than forcing customers to work around Following on from my first three predictions, here is another mind-bending one
them. And the banks who make life easier for customers are likely to be rewarded. that I’m certain will happen over the coming years... the re-brand of the banking
subscription model.
Creating this service-based model could also be hugely profitable for banks as a way of retaining
customers and enticing them into relevant products. For example, it’s estimated that at any given time, In the future, we probably won’t have independent financial products like current
between 2-4% of current account customers are hankering for a loan. Yet despite this, less than 10% accounts, savings accounts, or mortgages... we’ll have a subscription to a bank.
actually get one with their main bank. Building products that understand and work around customers’ Today, subscription models are taking the world by storm. A 2019 study found that a
needs will prevent those profitable opportunities from slipping through the net. jaw-dropping 92% of millennials pay into at least one subscription service. And the
likes of Revolut, Starling, Monzo and more have found the subscription model to be a
To achieve this and ensure that banking products and services reach their full potential, designers will success.
need to start “baking intelligence” into their designs.
Blending all my predictions so far together, into one monster forecast, I feel that
a hyper-personalized, super-intelligent subscription service will be the future for
Prediction 4: banking customers. Here’s to 2022!
Intelligence will be “baked into” products

Outside of Paul Hollywood cookery shows, it’s not often most people hear the phrase “baking
intelligence”. But within the world of FinTech design, it’s sounding more common-place. Attracting
customers with specific and relevant finance opportunities requires a data-led design process. The
ideal banking experience should follow customers right from their first childhood savings up until the
last pension is withdrawn. To the customer, it should – and probably will – seem like one constant
service.
Click to Tweet
Creating this seamless experience means that the banking products need to evolve with the customer. “Thinking in terms of the goal & not the loan will mark a revolution
Student accounts and mortgages need to be offered at the right time, at the digital convenience of the in the way #banking products are designed. Secure homes, not
customer. The transition from one account to another should be frictionless. And ideally automatic, with mortgages. A safety blanket, not a Cash ISA. A fulfilling, independent
little to no human intervention on the bank side. We’re talking about products that understand context. retirement, not a pension.”
Products that understand the life stage of customers, their behaviour, and their goals, and that will
behave according to these parameters. Products that react to what the customers do automatically. Learn more here https://bit.ly/3rYZvZV

#FinTech

10 | Making banking 10x better in 2022

MAKING BANKING 10X BETTER

2022: It’s finally

Patchworks and workarounds won’t fix this one and the banks know it. The work will always feel gradual
and inconsistent across the estate but that’s part of the journey of putting one foot in front of the other
until the end state is reached. And where that journey will take a lot of organizations this year is deeper

happening for
into their estate and in the spaces between systems.

LEDA GLYPTIS Prediction 2:

Banks! Chief Client Officer ‘Talk to me bro’

Open banking is not new. “Data is the new oil” is not new. But the plumbing that allows data to flow
freely so that it can work like magic has been a work in progress. Again, 2022 is a year where we will
see acceleration in the theme of connectivity both inside institutions and across them. As open banking
and open finance in general are maturing, people are getting creative fresh ideas of the art of the
Digital transformation work for banks is well into its second decade. It has been stop/ possible, from account aggregation and “have you thought about buying a house in the areas where
start for sure and progress hasn’t been linear or steady. But progress has been made. all your leisure spending is done, because you can afford a mortgage there” to dynamic collateral
management. To do that, human creativity has to meet… pipes. Systems that are designed to talk to
Every financial institution has some digital capabilities now and a plan of varying ambition. But each each other both within and across organizations. And those systems have been long in the making.
of these institutions has a very uneven estate internally: state of the art containerised architecture Sure we are not done yet but as with many other long-term trends the change doesn’t come when the
sitting alongside mainframes older than me (and let me tell you, that’s too old for a piece of critical tech work starts but when the tipping point is reached.
infrastructure). Maintaining an estate of ever-increasing complexity in an ever-accelerating market is
tough. And expensive. Hyper-personalization and true user-centric (or industry-problem-centric) design will be increasingly
possible as systems and regulatory frameworks have fostered an environment that allows people to
Unshackling yourself from “legacy” is complicated because of technology, governance, budgets, and creatively embrace the art of the possible.
humans. But each year sees us a little closer to making the hard decisions needed in this direction. I don’t
expect a stampede this year. But I do expect this theme to continue picking up pace and speed, and hard
decisions being made closer to the heart of the business.

This is not easy work and it’s not fast, but we do see it happening. And to achieve that, you need to start
from where you are, not where you wish you were.

Prediction 1:
The focus is shifting from experience-led technology to the pipes that enable it

Decision-makers looking at their own estate will see a combination of brand new things they’ve
bought, built, and partnered with over the past five years, alongside systems they’ve inherited from
the Seventies. They have a very uneven landscape of technology compounded by organizational and
governance complexity wrapped tight around it all. Digital capabilities were first built where they were
The functionality that rests on multiple
most visible or less risky and increasingly went deeper and wider where there was a combination of systems playing nice with each other is
regulatory pressure and market opportunity. That means that a lot of the invisible estate underpinning
and connecting these systems is often decades old and that comes with understandable limitations. the next frontier for banks, but to get
there a true overhaul of the invisible
You may have an all-singing, all-dancing app for your current account, but you don’t have a single view
of your customer across that product and the savings or lending services you offer them. You may have plumbing of the institutions is required.
a shiny payments infrastructure, but your liquidity management is creaky. The functionality that rests
on multiple systems playing nice with each other is the next frontier for banks, but to get there a true
overhaul of the invisible plumbing of the institutions is required.

11 | Making banking 10x better in 2022

Prediction 3:
Start from where you are
Hope: Banks will operate with intent
For the last 15 years, we have made predictions in January about the year ahead and although none
of the predictions was wrong, the speed with which we thought, feared, or hoped they would play My final prediction is more of a wish, and it’s intent. From what I can see, it’s finally
out was. This is complicated work, and it takes time. And the hardest thing to do in the midst of happening now.
complicated, long-term work in a fast-paced environment is to remember that you don’t start from
where the competition is. You start from where you are. You will have some unfair advantages. You will A lot of banks ditched projects under the pressures of COVID-19. Experiments
have some heavy legacy. Working around those made sense at the beginning. But now it is time to work and even incredibly ambitious 10-year transformation projects fell by the wayside
with and on them. Taking a long and realistic look at where you are (warts and all) is key to accelerating because people needed to make budgets work, deal with the real crisis at hand,
the work especially as “legacy” isn’t just COBOL code. It is also partnerships, clients, a balance sheet, and support their customers, teams, and communities. Now, we’re seeing first-hand
knowledge of the market, and a whole host of advantages, not just burdens. that recognition of the critical nature of useful technology, matched with the need to
deliver under tight financial resources. Banks in 2022 I trust and hope will retain this
The banks that look at their history, their legacy, and their estate and say, “OK, this is where I am and I focus and show real intent as to what they want to achieve next.
know where I am going so this is what I will do next”, are the banks that will truly accelerate to the finish
line now that the low-hanging fruit has been reaped. The journey hasn’t been easy this far and some of the hardest work is still ahead of
us. Not doing it is not an option. But doing it half-heartedly, sadly, is always an option.
Prediction 4: And it’s a terrible one! So, the winners will be the ones that bring vision and intent to
Nobody is standing still the rest of the journey.

Pre “FinTech”, banking was not static. But it was stable, change didn’t move as fast or go as far, and
banks (rightly or wrongly) felt much more in control of what they would choose to do to and what they
wouldn’t, especially in terms of technology. A combination of regulatory overhaul, a very competitive
landscape disrupted by challengers and technology, and, of course, the evolution of a digital economy
around banks, means that a lot of the decisions are made for the banks, be it because the regulator or
the economy demands certain things or because technology evolution sets a pace that doesn’t wait for
you to complete your strategy.

That is a given and has been for over a decade but that is not the whole story.
Click to Tweet
We speak of the incumbents as if they were an undifferentiated mass, but they are not. Some #DigitalTransformation work for banks is well into its second decade.
incumbents have done much better and gone much further on their digital journey than others. And It has been stop/start & progress hasn’t been linear or steady.
they create real competitive pressure for each other. Although the challengers and the neo-banks
have long been looked at as the real innovators changing the landscape, what we are seeing is some But where has progress been made?
incumbents learning fast, and combining the hard lessons they have learned on this journey, the
inspiration they got from the challengers, and their own competitive advantage (be it scale, their brand, Get the e-book to learn more https://bit.ly/3rYZvZV
customer base, or their fortress balance sheet) to accelerate their own journeys: to build capabilities
fit for the new economies powered by new learnings and old tricks. There is a reason why we call it an #FinTech #BankingTechnology #Innovation
“unfair advantage” and the banks that reflected on what theirs is and realized it was not their legacy
technology will be making waves this year.

12 | Making banking 10x better in 2022

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Antony Jenkins, CBE, of deep banking and with hubs in the
ex-CEO of Barclays big tech expertise UK and Australia 10xbanking.com | [email protected]