Innovation in Retail Banking

Shaping Banking’s Next

 Contents

■ Message from Sajit Vijayakumar, CEO, Infosys Finacle 03

■ Message from John Berry, CEO, Qorus 04

■ Message from Jim Marous, Co-Publisher, The Financial Brand Owner and CEO, 05
Digital Banking Report Host, Banking Transformed Podcast

■ Evolution of Retail Banking: Tracing a Decade of Innovation and Transformation 06

■ Rethinking the Business Model for Digital Era 26

■ Scaling Organization Capabilities to Drive Continuous Innovation 42

■ Rapid Creation and Delivery of New Value 74

■ Conclusion 106

■ Contributors and Survey Demographics 108

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 Message from

Sajit Vijayakumar,
CEO, Infosys Finacle

I am pleased to present the 15th edition of the Innovation in Retail Banking research, developed identifies the top four emerging archetypes that banking executives expect to dominate by 2030,
in collaboration with Qorus and Jim Marous. including digital-only offerings, financial marketplaces, digital advisory services, and banking-as-
a-service models. However, many banks face challenges in aspects like articulating a clear vision,
The global banking industry stands at a pivotal crossroads after significant investments to enhancing process agility, and enabling co-innovation in offerings.
advance digital maturity. While foundational elements are in place, the path forward remains
complex and multifaceted. Banks must continue to innovate across several domains: adopting 2. S
 caling Capabilities for Continuous Innovation: Strategic deployment of both established and
new business models, enhancing digital engagement, achieving operational agility, fostering emerging technologies is crucial. While some banks are deriving value from open APIs, cloud
an innovation-centric culture, and integrating advanced technologies like cloud computing, services, and AI, areas like the Internet of Things (IoT) and immersive media see over 80% of
artificial intelligence (AI), and enhanced security measures. Additionally, they face a more initiatives falling short of expectations. Preferences for cloud deployment models vary due to
stringent regulatory landscape focused on resilience and customer protection. operational needs, regulatory concerns, and legacy system complexities. Banks are prioritizing
AI investments that directly impact business outcomes and customer engagement. However,
This year’s research captures financial institutions’ progress as they navigate a challenging yet only 16% of respondents consider their application architecture best-in-class across capabilities
promising environment. For instance, only 11% of banks believe they have managed to scale like scalability, security, modularity, and cloud-native adoption, indicating significant room for
transformation initiatives and achieve expected outcomes. This indicates that although most improvement.
banks in the survey are advancing digitally, so are their goalposts. Banking executives believe
that the market’s dynamism will continue to accelerate: 80% believe embedded banking will 3. R
 apid Creation and Delivery of New Value: Non-banks have led innovation in certain segments,
drive over half of transactions by 2030, 80% also anticipate that over three quarters of enterprise redefining value creation and delivery. Banks can improve by innovating products and services,
banking applications will reside in the public cloud, 85% expect AI to become ubiquitous in the reimagining customer experiences, and adopting new ecosystem partnership models. There’s
industry, and 90% foresee cybersecurity threats and budgets more than doubling. Furthermore, a need to enhance digital engagement and mature AI initiatives across the customer lifecycle,
70% predict that non-incumbents will secure over one third of the retail banking market share, especially post-onboarding. Banks also have significant opportunities to innovate in products
highlighting a fiercely competitive landscape. like cards, wealth management, and non-traditional offerings.

To stay relevant in this evolving ecosystem, banking leaders acknowledge the need for a Alongside these benchmarks, the report includes practical insights from qualitative interviews
comprehensive approach to innovation and transformation. The report suggests three focus with 10 global banking leaders and over 40 innovation case examples. These findings provide a
areas to energize innovation and help banks benchmark their progress against industry comprehensive view of the strategies, challenges, and successes shaping the future of retail
standards: banking.

1. Business Model Innovation: Banks that are scaling new business models suited to the digital We hope this report serves as a valuable guide in strengthening your bank’s digital and innovation
age are better equipped to meet evolving and nuanced customer expectations. The report strategy. As always, we welcome your thoughts and feedback.

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 Message from

John Berry
CEO, Qorus

15th Edition of the Qorus-Infosys Finacle Innovation in Retail Banking Report: Shaping Banking’s Next
The scramble to test and roll out GenAI applications has been one of the standout features of the deliver to SMEs in Spain; and Brazilian bank Bradesco, using GenAI to boost its operational
retail banking landscape during the past year. Banks across the world have been quick to harness efficiency, innovation and customer service.
the capabilities of increasingly powerful and cost-effective generative AI technologies.
This year’s Innovation in Retail Banking report, a collaboration between Qorus, Infosys Finacle and
However, behind the widespread adoption of GenAI lies a deeper trend. The Financial Brand, examines the major shifts in the banking industry that are forcing institutions
to adapt - and to adapt quickly. It reports how banks at the forefront of change are successfully
Banks are grappling with the urgent need to create and deliver new value quickly. GenAI is transforming their business models and technology resources. Furthermore, the report points to
helping them rise to this challenge. So too are technologies such as Open APIs, blockchain, challenges and opportunities on the horizon.
immersive media and, of course, cloud computing. But the need to provide customers with new
products and services, which often address clients’ fast changing circumstances, requires banks This year’s report reveals that many bank leaders expect further industry consolidation and a rise
to do more than just adopt promising technologies. They must also rethink how they will run and in competition from new entrants. Anticipation of those changes will likely force banks to quicken
grow their businesses. Traditional banking business models, as many institutions have come to their adoption of new technologies, speed up the switch to more flexible business models, and
realize, can’t respond quickly enough to the rapid and frequent changes occurring at the onset hasten efforts to create new value for themselves and their customers. The future looks set to
of the digital era. Change today is indeed a constant. And retail banks must ready themselves and become even more demanding.
their technology resources for continuous innovation.
I recommend the Qorus-Infosys Finacle Innovation in Retail Banking report to all leaders and
Many banks are already demonstrating their ability to react quickly and effectively to the decision-makers in the banking sector. It provides insights into our industry that are both useful
changing requirements and aspirations of their customers. This year’s Qorus-Infosys Finacle and thought-provoking.
Banking Innovation Awards, for example, showcased the agility, foresight, and creativity of many
institutions across the world. Notable innovators include Československá Obchodní Banka, This year’s report would not have been possible without the input and support of Infosys Finacle.
transforming its business model by providing customers access to around-the-clock shopping in They have proved to be an outstanding partner and their contribution to this venture and to the
the Czech Republic; Banco Santander, enhancing the customer experience its service channels Qorus-Infosys Finacle Banking Innovation Awards has been invaluable.

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 Message from

Jim Marous
Co-Publisher, The Financial Brand Owner and
CEO, Digital Banking Report Host, Banking Transformed Podcast

Building an Innovative Organization for 2030 and Beyond

The landscape of retail banking continues to evolve at an unprecedented pace. As we present our The role of technology in shaping banking’s future cannot be overstated. By 2030, more than 75
2024 Innovation in Retail Banking report, we find ourselves at a pivotal moment: The democratization percent of enterprise banking applications are expected to reside in the public cloud, while AI
of data, insight, and new technologies is reshaping how we bank and who can lead banking and machine learning are projected to become ubiquitous, particularly in personalization and risk
innovation. management. Cybersecurity investments are also anticipated to more than double, reflecting the
growing importance of digital trust and operational resilience.
A critical insight from our research challenges conventional wisdom: size no longer dictates
innovation maturity. Thanks to the rapidly expanding capabilities of solution providers, organizations However, progressing along the digital continuum will remain challenging. Only 27 percent of
of any size can now innovate at speed and scale. This means regional banks and community financial banking executives believe incumbent banks will lead innovation across all business lines by 2030,
institutions can compete effectively with global giants to meet evolving marketplace needs. and only 8.5 percent report successfully fostering innovative ecosystems at scale. Additionally, less
than 15 percent feel fully prepared to capitalize on embedded finance opportunities in critical
While our research shows that only 11 percent of banks have deployed digital initiatives at scale with
areas such as vision, technology infrastructure, and organizational agility.
expected outcomes, the true differentiator isn’t technological investment —it’s leadership vision.
The most successful organizations are distinguished by leaders who embrace change, understand As we navigate this transformative period, success will depend on banks’ ability to reimagine their
calculated risk-taking, and foster democratized innovation throughout their organizations. business models, scale organizational capabilities, and accelerate the creation and delivery of new
These visionary leaders blend legacy experience with fresh perspectives, creating cultures where value propositions that increase engagement. This requires a holistic approach encompassing
innovation thrives at all levels. people, processes, and technology, supported by a culture of continuous innovation.
Looking ahead to 2030, our findings paint a picture of significant industry transformation. Over As we navigate this transformative period, the winners will not necessarily be the largest or most
70 percent of banking executives anticipate a substantial wave of consolidation, and an equally well-funded institutions but those with the most adaptable cultures, forward-thinking leadership,
high percentage expect non-traditional players to serve an expanded proportion of the consumer and a willingness to build modern solutions with strategic partnerships.
and business banking markets. Organizations must succeed by leveraging generative AI,
We trust this report will provide valuable insights and guidance as you chart your organization’s
cloud technology, and marketplace research while simultaneously developing internal talent—
course through the evolving landscape of retail banking innovation.
independently or through strategic partnerships.

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 1

Evolution of Retail
Banking: Tracing a
Decade of Innovation
and Transformation

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 1. Evolution of Retail Banking: Tracing a
Decade of Innovation and Transformation

When the inaugural edition of the Innovation in Retail Banking came out in 2009,
the world was being rocked by the Great Financial Crisis, the banking industry had
not yet been disrupted by new technologies or players, and Internet Banking was
seen as the most significant innovation in fifteen years. The banking universe has
changed dramatically since then, with accelerated digital banking adoption, instant
digital payments catching on like wildfire, generative AI promising a myriad of
new possibilities and a significant proportion of banking itself is being embedded
outside traditional banking channels, to name a few.

Over the past decade and a half, this Innovation in Retail Banking study has traced
the industry’s transformation, with special emphasis on innovation – its drivers and
imperatives, challenges and roadblocks, best practices, and investment trends.
It has also provided benchmarks for banking executives to reflect on where their
organizations are in their innovation journeys and how they can move forward.

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 1.1 Innovation Imperatives: Familiar Yet Evolving

Customer expectations, margin pressures, new technology, ■ Banks are dealing with a dual progression of technology,
competition, and compliance continue to top the list of where new technologies are emerging while existing
innovation imperatives, albeit in new weights and shapes. technologies are maturing. So, on the one hand, banks will
look to experiment with technologies like generative AI
■ Customers, who in the 2010s, demanded 24/7 banking
and web 3.0, and on the other, accelerate the adoption of
access, now expect those services to be already
‘mainstream’ technologies like cloud and APIs.
embedded inside the chain of activities when they buy
a home, take a vacation, fund a child through college, or ■ In fifteen years, fintechs have gone from being “startups”
stock up the refrigerator; And beyond everyday banking, to challengers, while tech biggies, such as Apple, Amazon,
they want financial advice and experiences to be hyper- Google, WeChat, Ant Financials, AliPay and PayTM have
personalized. made further inroads as prominent players in the industry.

■ Margin pressure existed then, as it does now, but today, ■ New imperatives have also emerged, such as protecting
banks are attacking it with AI-driven automation and data security & privacy, building business resilience,
alternative revenue streams in addition to cost cutting and meeting growing ESG (Environmental, Social and
efforts. Governance) mandates.

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 “I see three major forces that are driving the evolution of banking as we know
it today. One, digital-natives are forcing banks to advance their technological
capabilities and foster innovation. We see it happening across the planet though
not evenly… The second one, that’s really become prominent in recent years is
regulation and data residency… The last one, which I really find fascinating, is the
rise of artificial intelligence and how it’s becoming more prevalent.”

Boe Hartman, Co-Founder and CTO, Nomi Health, Ex-Goldman Sachs

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 1.2 The Digital Continuum

As the innovation imperatives evolve and unfold, banks have been navigating collaborative banking, where banks co-create new sources of value with
a rapidly evolving digital landscape over the past few years. Their innovation their ecosystem partners; in this open environment, more than 50 percent of
and digital transformation journeys now span a continuum, where each wave customer engagement will happen on third-party, non-bank channels.
of change builds upon the last. This digital continuum reflects not just the
While the pressure on margins remains strong, cost to income ratios have
technological shifts but also the growing strategic importance of co-creation,
eased due to digitization. The 50-60 percent cost to income ratios of the early
ecosystem partnerships, and the rise of open banking.
2000s (digital 1.0) reduced to 40-50 percent in digital 2.0, and dropped below
Going from left to right, the digital continuum traverses three waves of 40 percent in digital 3.0, with some next-gen players even boasting ratios of
digitization, and depicts how important areas in banking have evolved the order of 20-30 percent. Compared to mid-tier incumbent banks, digital-
between digital 1.0 and digital 3.0. only providers running on cloud-native technology platforms could have a 60
to 70 percent lower cost base.
Let us start with engagement. During digital 1.0, when branch-based
processes were starting to be replaced by digital equivalents, less than 50 Coming to digital banking application landscape, the homegrown solutions of
percent of customer engagement occurred outside the branch; come digital the first digital wave were replaced by packaged applications in the second,
2.0 and the reimagining of customer journeys with contextual interactions, and in the third, by composable solutions built on a foundation of APIs and
more than 90 percent of customer transactions were seen to occur on digital microservices. At the same time, some bank workloads migrated from the
channels. Digital 3.0 envisions a new banking paradigm, where “universal banks’ premises to private cloud in digital 2.0; in digital 3.0, more and more
banks” and “proprietary products and channels” are making way for open/ workloads are residing in public or hybrid cloud.

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 Transformation across multiple dimensions

Digitized Traditional Business Reimagination with Digital-First Creating and Delivering New Value
Business Models
Model Business Model Design with Ecosystems

Customer Engagement < 50% outside the branch > 90% on digital channels > 50% on third party channels

Cost to Income Ratio 50-60% 40-50% 30-40%

Product managers with significant Product managers with limited Co-create products with brands &
Product Innovation
support technology teams technical support customers

Banking On Cloud On premise Private cloud Public & Multi-Cloud

Multiple channels and social Truly Omnichannel for Bank-owned &

Banking Channels Omnichannel
networks Partner Channels

……. ……. ……… ………….

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 1.3 Progress on the Digital Continuum: Banks’ Ongoing Innovation and
Transformation Journey

11%
How has the industry responded to the innovation imperatives? The study
has been tracking the progress of banks’ digital transformation success – the
heart of banking innovation – for the past few years. In this year’s survey, just
11 percent of the participating banking executives said their organization had
deployed digital transformation initiatives at scale, with expected outcomes.
On the face of it, this finding may appear discouraging, but it does not tell the
whole story. of the participating banking
The reality is that banking innovation is not an absolute goal, but a moving executives said their organization
target that organizations have to chase by journeying along the digital
continuum. It is also important to note that 40% of the banking executives
had deployed digital transformation
believe that they have partially deployed digital transformation initiatives initiatives at scale that are delivering
delivering outcomes as expected. Seen in this light, the findings show that while
only a few banks are seen as achieving their target, many more are making as per expectation
steady progress on the journey to transformation.

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 Status of Digital Transformation
Reflection of Moving Goalposts

45
40.3
40

35 Limited deployment, results unknown

28.8 Partially deployed initiatives, not

30
delivering as per expectations
25 Partially deployed initiatives, delivering
as per expectations
20
Deployed initiatives at scale, not
15 delivering as per expectations
11.5
9.8
10 Deployed initiatives at scale, delivering
6.6 as per expectations
5

0
Percentage of respondents

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 1.4 Shaping Banking’s Next: A Vision for 2030 and Beyond

A bank’s position on the digital continuum speaks to their players merge or evolve, they will emerge as leaders in a
innovation maturity, and is also an indicator of how far they’ve landscape where technological prowess is the key to staying
come on their transformation journey. Drawing on the competitive.
elements in the continuum, we framed a few questions on how
The future will see new leaders rise.
respondents saw the future of banking.
With nearly 70% of banking executives predicting that non-
The Industry Consolidation Wave:
traditional players—fintechs and tech giants—will command
The survey results indicate a significant shift in the landscape over 30% of the consumer banking market, the boundaries
of the banking industry by 2030. According to survey insights, between industries will blur. Tech-savvy innovators will bring
over 70% of banking executives foresee a major wave of fresh perspectives, infusing the sector with a level of dynamism
consolidation, signaling an era where agility, innovation, that will challenge established norms. The rise of these players
and scale will be paramount for survival. This is not a sign signifies not the end of traditional banking, but the dawn of a
of contraction, but rather a path to building stronger, more collaborative ecosystem where banks, fintechs, and tech giants
resilient institutions that are fit for the future. As traditional partner to deliver unparalleled value to consumers.

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 2030 Perspectives

Growing MnA New Leaders Rise Embedded Banking

70% foresee a major wave of 70% believe non-incumbents 80% believe it will drive
industry consolidation will command 30+% share in the over 50% transactions
consumer segment.

Cloud AI @ Scale Cybersecurity

80% believe 3/4th of enterprise banking 85% believe that AI will become 90% foresee threats and budgets
applications will reside in the public cloud ubiquitous in the industry more than doubling in this space

CBDCs Digital Identity ESG

40% believe CBDCs will evolve a More than 70% of banking executives 65% believe green and sustainable
key form of value exchange expect global digital identity systems banking will account for over 30% of
to become a standard all banking products

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 Embedded banking will be the new Sustainability will be become a core pillar of
frontier: industry’s future growth:

The survey results set a clear benchmark: by The survey results underscore the fact
2030, embedded banking will no longer be that the future of banking will be strongly
an emerging trend but the new standard, intertwined with sustainability. With 65% of
with over 80% of banking executives banking executives predicting that green
agreeing that third-party apps will drive and sustainable banking will account for over
more than half of all banking transactions. 30% of all banking products by 2030, ESG will
Preparing for this shift requires banks to move beyond being a regulatory requirement
adopt agile digital strategies, integrate to become a core pillar of the industry’s
deeply into the digital ecosystems where future growth. Banks must see this as both
consumers and businesses operate, enhance a responsibility and an opportunity to lead in
data-sharing capabilities, and cultivate creating a more sustainable world, aligning
a culture of innovation that embraces their product portfolios with the values of
collaboration across industries. consumers, businesses, and regulators alike.

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 “In the open finance scenario, three years after its launch, initiatives from financial institutions are
maturing, in a pursuit to generate value for the customers who choose to use it…. Consequently, the
financial sector has seen a significant increase in competition, with fintechs and non-financial players
entering the market. Traditional monetization models are being challenged, and digital transformation
is fundamental for preparing financial institutions for the future. Customers demand real-time
solutions now of need within their journey, and banks should adapt to provide these solutions.”

Renata Talarico Petrovic, Head of Innovation, Bradesco

“Open banking and finance are all about connecting opening to broader ecosystem. Security is a very
high priority for the bank. So, the challenge is being open while maintaining a high level of security
because being open means data sharing & hosting on public clouds.”

Marina Shehfe, Retail Transformation Officer, BNP Paribas

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 Cloud: The Backbone of Future Banking: those still on the sidelines, now is the time to build the necessary
AI infrastructure and governance frameworks to ensure ethical,
The survey reveals a resounding consensus - by 2030, more than
effective AI deployment.
75% of enterprise banking applications, including core systems, will
reside in the public cloud. The cloud will be the backbone of next- Cybersecurity:
generation banking, empowering institutions to experiment with
Rising Threats, Rising Investments: With over 90% of banking
other cutting-edge technologies like AI, quantum computing, and
executives predicting that cybersecurity investments will more than
blockchain. Banks that have already invested in a comprehensive
double by 2030, the implications are clear: as threats grow more
cloud migration strategy are setting themselves up for success.
sophisticated, robust cybersecurity will be the bedrock of trust and
No surprises with AI and Machine Learning: operational resilience in the banking sector. Banks that prioritize
advanced security measures, such as AI-driven threat detection
AI and machine learning are expected to become ubiquitous by
and zero-trust architectures, will not only protect themselves but
2030, according to over 85% of banking executives, particularly in
also differentiate their brands in the eyes of increasingly security-
the areas of personalized services and risk management. Banks that
conscious customers. By now, banks should have already embraced
have already made progress on integrating AI into their customer
a multi-layered defense strategy, with continuous innovation and
engagement and operating models will be at the forefront. For
monitoring at its core.

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 Quantum Computing: Digital Identity: Streamlining Compliance and Enhancing
Security:
Unlocking the Next Frontier: Quantum computing, once a distant
concept, is projected to be a transformative force in banking by By 2030, more than 70% of banking executives expect global digital
2030, with 65% of banking executives expecting it to be used for identity systems to become a standard, dramatically streamlining
complex tasks like real-time fraud detection and risk analysis. Banks KYC and AML processes. Banks that have invested in secure digital
should already be investing in quantum research and establishing identity platforms and aligned with global regulatory standards will
partnerships to ensure they are ready to deploy this cutting-edge be positioned to thrive in this new era of streamlined compliance.
technology when the time comes.
CBDCs: The Future of Currency:
Blockchain is set to revolutionize cross-border payments and
Although still in the experimental phase, over 40% of banking
trade finance by 2030, according to nearly 65% of surveyed banking
executives are seeing CBDCs as a key form of value exchange. To
executives. Banks that want to be serious about this technology
stay competitive, financial institutions must engage with central
should already be building partnerships, exploring distributed
banks and prepare their customers for this monumental shift in
ledger technologies, and scaling blockchain initiatives to seize this
how value will be exchanged.
opportunity.

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 1.5 Challenges Faced by Banks to
Progress Across the Continuum

While the vision for 2030 paints an exciting future for banking, the
reality of where banks stand today reveals significant challenges in
progressing along the digital continuum. According to our survey, only
27% of banking executives believe incumbent banks will be leading
innovation across all business lines by 2030. Even more striking, only
8.5% of respondents say their banks have successfully fostered an
innovative ecosystem with initiatives deployed at scale and delivering
expected outcomes. Moreover, less than 15% of banking executives
feel their organizations are fully prepared to capitalize on embedded
finance opportunities across key areas such as vision, technology
infrastructure, strategic partnerships, and organizational agility.

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 Several challenges continue to hinder banks from moving forward as quickly as Balancing Innovation and Regulatory Mandates:
desired. Based on our findings, here are the top six challenges:
While innovation is essential, banks also face the challenge of complying with
Balancing competition with co-opetition: stringent regulatory requirements around ESG, data privacy, cybersecurity, and
resilience. Striking the right balance between fostering innovation and ensuring
One of the most pressing issues for banks is maintaining a clear vision for
compliance is often a complex and resource-intensive task, causing many
competitive advantage while simultaneously fostering collaboration with
institutions to move cautiously in their digital initiatives.
fintechs, big tech, and players from other industries. In a landscape where
competition and partnerships are constantly shifting, banks struggle to balance Talent and Skills Gap:
innovation with collaboration, often leading to fragmented strategies.
As the industry becomes more technology-driven, the demand for new skill
Legacy Systems and Data Utilization: sets has intensified. Many banks face difficulties in attracting, retaining, and
upskilling talent with expertise in emerging technologies such as AI, blockchain,
Legacy technology remains a significant barrier to innovation. Many banks still
and quantum computing. Without the right talent, banks will find it difficult to
rely on outdated systems that limit their ability to integrate new technologies
execute their innovation strategies at scale.
such as AI and advanced data analytics. This inability to effectively harness data
for decision-making and customer personalization is holding back the digital Agility in Strategy and Operations:
transformation process.
Organizational agility remains a hurdle, with many banks struggling to adapt to
Innovation and Digital-First Mindset: rapid changes in market demands and customer expectations. Slow decision-
making processes, rigid hierarchies, and lack of flexible operational models are
Cultivating an organization-wide innovation mindset is another challenge.
inhibiting banks from moving quickly enough to seize new opportunities or
The shift to a digital-first approach requires a deep cultural transformation,
pivot when needed.
yet many banks are struggling to embed this mindset into their DNA. The
challenge extends to leadership, where fostering an environment that promotes
experimentation and embraces failure is crucial for driving innovation.

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 1.6 A Comprehensive Approach to Innovation:
The Path Forward

To overcome these challenges and accelerate in people, processes, and technology. Banks
innovation, banks understand the need to adopt must foster a culture that promotes agility,
a multi-faceted and comprehensive approach empowers employees to experiment, and
across the below three key dimensions. In this equips teams with the right tools and data to
year’s report and the following chapters, we have drive innovation at scale.
assessed the progress of the industry across
3. R
 apid Creation and Delivery of New Value:
these dimensions.
Banks must focus on the rapid development
1. R
 ethinking the Business Model for the and deployment of new products and
Digital Era: Banks need to reimagine their services that enhance customer experience.
customer segments and target business This involves optimizing channels, improving
models for the digital-first world. This involves customer journeys, and building ecosystems
identifying new revenue streams, exploring of partners that can help deliver value more
untapped markets, and embedding finance quickly and efficiently.
into ecosystems that align with customers’
By addressing these challenges head-on and
lifestyles.
adopting a holistic innovation strategy, banks
2. S
 caling Organizational Capabilities for can accelerate their progress along the digital
Continuous Innovation: Building a culture of continuum and position themselves as leaders in
continuous innovation requires investments the banking landscape of 2030.

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 Three Key Dimensions to
Drive a Comprehensive Innovation Agenda

#1
Rethinking the business
Customer Segments and Target Business Models
model for digital era

#2 Scaling organization
capabilities to drive People and Culture Agile processes Technology and Data
continuous innovation

#3
Rapid creation and
Product and Services Channel and CX Ecosystem
delivery of new value

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 2

Rethinking the
Business Model for
Digital Era

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 2.1 Scaling Business Models for Profitability in the Evolving Banking Landscape

New age banks carefully select the customer segments they serve,
unburdened by legacy portfolios and existing customer bases. In
contrast, traditional banks not only manage these legacy commitments
but also face significant pressure from investors to prioritize customer
segments within their chosen business areas. Achieving the right
combination of customer segments and the depth and breadth of
product/service offerings is crucial for profitability. Choosing customer
segments strategically
Emerging new business models empower banks to tap into nuanced
customer segments and create or co-develop offerings that meet Business Model
these segments’ needs, generating significant economic profits for
stakeholders. With customer expectations and the digital landscape Market competitive
continually evolving, banks must adapt and scale new business models products & services
to stay competitive and relevant. Tailored channels mix

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 2.2 Customer Segments, Contexts, and Expectations Continue to Evolve

Retail Customer Segments Distinct Customer Contexts Ever Rising Customer

Expectations
The digital era has opened up Banking continues to be increasingly
opportunities for banks to tap intertwined with various life contexts, Modern customers expect financial
nuanced and diverse customer necessitating tailored and real-time services to be
segments, each with distinct needs offerings
Contextual | Smarter / more accurate |
and preferences
Home | Health | Education | Shopping Automated | Real-time | Secure | …
Gig workers | Immigrant population | Travel | Transport | Wealth | …
| Gen Alpha | Unbanked population
with access to smartphones | Senior
Tech Adopters | High net worth
millennials | …

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 “New embedded finance solutions and Banking-as-a-Service solutions also allow financial
services to be at the point of need, creating revenue opportunities. By embedding finance in
other contexts, the customer receives the financial offer at the exact moment of her need, with
a lower degree of friction and potentially reducing the churn in the journey in question. This
is in line with the whole idea of developing products and services with the customer at the
center, seeking to meet her expectations and generate connections with her; and no longer
adopting a product-centric design, which would previously aim for immediate profit to the
detriment of a longer-lasting relationship.”

Renata Talarico Petrovic, Head of Innovation, Bradesco

30 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.

 2.3 Eight Emerging Banking Business Model Archetypes
Eight new banking business archetypes are emerging that empower banks to create and deliver value in innovative ways. These archetypes redefine how banks interact
with customers, integrate technology, and adapt to changing market dynamics to meet diverse customer needs effectively.

1 Digital bank

Digital banks deliver

banking services
entirely (or almost
2 Digital financial advisor

Digital financial advisors

deliver financial
advice by using AI to
3 Embedded finance

Companies with frequent

engagement and deep
customer understanding
4 Banking as a Service

Banking as a Service
(BaaS) offers complete
banking processes,
entirely) through understand customers’ are embedding banking typically through
digital touchpoints. financial situation and and payments into non- APIs, that third parties
recommend actions. financialproducts and can embed into their
services. products and services.

5 6 7 8
Banking curator Finance marketplace Non-finance marketplace Banking industry utility

These digital banks aim Finance marketplaces Non-finance marketplaces Banking industry utilities
to offer best-of-breed build infrastructure to build infrastructure to specialise in delivering
products by combining help customers choose help customers choose non-differentiating
basic accounts with financial services from goods and/or services services by pooling
financial advice and multiple third-party from multiple third-party resources, expertise, and
a curated set of third- suppliers in an open suppliers in an open capabilities to increase
party products. environment. environment. efficiency.

Source: Report “Developing innovative digital banking business models” by 11:FS in association with Infosys Finacle

31 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.

 “In terms of new business models, we are seeing and experiencing new business model
in our region. For Bank as a platform model, we embed third parties, product offers or
technologies within our channels. So, for example, cyber insurance, for SMEs, is integrated
in our platform, as well as business financial management tool for small businesses. On
bank as a service, basically we embed our core products and services within third parties,
channels, for example SME lending as a service is on the rise.”

Marina Shehfe, Retail Transformation Officer, BNP Paribas

32 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.

 8 Emerging Banking Business Model Archetypes: Innovation Case Studies

Digital Banks Digital Financial Advisor Embedded Finance Banking as a Service

Nequi, Bancolombia’s digital UK fintech Plum links with Kasikorn Line, Thailand, a joint Cross River’s API-driven banking
only bank provdes a wide range customers’ bank accounts via venture between Kasikorn Bank infrastructure embeds financial
of financial and non-financial open banking. It then uses AI to and Line, launched a range of services across industries and
services, which allow users to pay analyse customers’ spending and banking services that are offered provides the foundation for
with the Nequi Card, bring dollars automatically identify how much via messaging app LINE BK. regulatory compliance upon
through PayPal, pay for public they can afford to set aside into a which its partners grow.
services and more savings pot or investment account
each month

Banking Curator Finance Marketplace Non-Finance Marketplace Banking Industry Utility

BMTX in the US BankMobile Vibe The Raisin platform connects “Travel Guru,” launched on the Dutch mortgage processor Stater
Checking Account is a digital- savers with financial institutions HSBC HK Reward+ app, is the serves banks across the Benelux
only, FDIC-insured, interest- through its award-winning first bank-driven Travel Rewards region. Stater offers a complete
bearing checking account marketplaces, available across Membership Program in Hong range of services across the
designed specifically for students. Europe and the U.S. Kong. mortgage and consumer lending
value chain with deep capabilities
in digital origination, servicing
and collection.

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 “The embedded finance, the invisible banking as often mentioned. Banks are now getting
into this new role. Being invisible through the support for example, of the customers of a
retailer, where we get into that journey to facilitate their primary target, which is to buy a
TV or something else for example. So, we need to get into the proper step in a simple way
and finance their needs without changing their experience, using APIs. Many similar cases
addressing C2B or B2B journeys are in scope for Embedded finance that will certainly be of
our highest priority for the next years.“

Harris Mygdalis, Chief Digital Officer, Eurobank, Greece

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 2.4 Top Three Business Models to
Build and Scale by 2030

The survey showed that by 2030, digital-only banking

propositions and financial marketplaces will lead, with 61.5%
of banking executives favoring them due to their scalability,
lower costs, and ability to meet customer demands for
seamless experiences. Digital financial advisory (58.5%)
ranked second, driven by the growing need for personalized,
real-time advice. Banking-as-a-Service (46.9%) followed,
enabling banks to expand via ecosystem partnerships. Super
apps, banking utilities, and non-financial marketplaces were
less favored, likely due to regulatory complexity and limited
alignment with core banking services.

35 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.

 Top Three Business Models to Build and Scale by 2030

Digital-Only Offering 61.5

Financial Marketplace 61.5

Digital Financial Advisory 58.5

Banking as a Service (BaaS) Offering 46.9

Super App 28.5

Banking Utility 23.1

Non-Financial Marketplace 20

% of banking executives who ranked the business model among their top three priorities for adoption by 2030.

Source – Infosys Finacle and Qorus Innovation in Retail Banking Research 2024

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 “Among the new types of business models, there are platforms such as marketplaces that
integrate and present solutions from different providers for the customer. This model entails
indirect monetization strategies and prioritizes the customer experience, providing features
such as price comparison, frictionless and complete journey. One use case of this model
is e-agro, a marketplace that offers lines of credit, including CPR Digital and Rural Credit,
without the need to leave the farm. Additionally, e-agro features a digital store where the
farmer can purchase agricultural products and supplies from trusted brands.”

Renata Talarico Petrovic, Head of Innovation, Bradesco

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 2.5 Succeeding with Emerging Business Model Requires a
Comprehensive Approach

Adapting and scaling new business models within incumbent banks ■  egulatory Compliance: The bank’s ability to navigate the
R
is undeniably complex, given the deeply rooted legacy systems and complex regulatory landscape associated with offering
cultural resistance to change. To thrive in an embedded finance banking services through third-party platforms.
ecosystem, banks need a holistic strategy that seamlessly aligns their
■  roduct Innovation: The capacity to co-innovate and create
P
vision, technology, and organizational agility. Banking executives
tailored solutions with partners.
globally agree that several key factors contribute to success in this
transformation. In this year’s survey, we asked banking executives to ■  ustomer Data Management: The preparedness to manage
C
rate their success across each of these parameters. and leverage customer data securely and effectively within
embedded finance ecosystems.
■ Vision: How aligned is the organizational vision and strategy? How
strong is the executive sponsorship to capture the opportunities? ■  isk Management: The readiness of banks to address the
R
unique risk management challenges posed by embedded
■  echnology Infrastructure: The readiness of technology
T
finance, including fraud prevention and credit risk
infrastructure for embedded finance, including APIs and SDKs for
assessment in decentralized environments.
seamless integration with third-party platforms.
■  rganizational Process Agility: The ability of banks to
O
■  trategic Partnerships: The extent to which the bank has formed
S
operate with the necessary agility, including rapid decision-
or has the readiness to form strategic partnerships with fintech
making processes and a culture that supports innovation.
companies, e-commerce platforms, and other non-financial
businesses.

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 Adopting Emerging Business models
Progress Snapshot

% of banking executives that have deployed initiatives (partially % of banking executives that have deployed initiatives (limited /
or completely) that are delivering as per expectations partial / significant) that are not delivering as per expectations

Regulatory Compliance 56.50% 43.40%

Risk Management 51.30% 48.70%

Customer Data Management 47.00% 52.90%

Organizational Process Agility 36.30% 63.70%

Vision 36.50% 63.50%

Product Innovation 40.50% 59.60%

Technology Infrastructure 41.90% 58.00%

Strategic Partnerships 46.70% 53.30%

Indicates top 3 areas where banking executives have deployed initiatives Indicates 3 areas where banking executives have deployed initiatives
(partially or completely) that are delivering as per expectations (limited / partially / completely) that are not delivering as per expectations

39 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.

 When asked about their readiness to capture the opportunities of embedded
banking across key factors, banking executives highlighted three areas where they
have made significant or partial deployment of initiatives with results delivering as
per expectations: regulatory compliance (over 56%), risk management (over 50%),
and customer data management (47%). This signals that while progress has been
made, it is primarily in areas driven by regulatory mandates, with banks laying
solid foundations in risk management and data handling—both critical, yet not
sufficient, for success in the rapidly evolving ecosystems of embedded banking.

Conversely, the areas where banks have deployed initiatives but are not yet
meeting expectations include vision (over 63%), organizational process agility (over
63%), and product co-innovation and co-creation (nearly 60%). These are pivotal
to driving future success, where banks must align their strategies and execution
to secure a dominant role in the embedded banking landscape. The positive
takeaway is that banks already investing in these areas, signaling intent to bridge
these gaps.

To make meaningful progress, banks must prioritize aligning their vision with
emerging opportunities, cultivate an innovative culture, enhance agility in their
processes, and ensure their technology infrastructure is composable and future-
proof. Only then can they fully capitalize on the opportunities in the market.

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 2.6 A Blueprint for Designing New Map customer
ecosystems
Models to Create, Deliver, and
Realize Better Value Monitor and Identify value
Adapt

To thrive in the competitive landscape of retail banking, institutions

must rigorously innovate and refine their business models. The
blueprint provided here lays out a systematic nine-step approach to
Implement Scaling Build a viewpoint
design, test, and implement new business models that are primed Strategies Target Business on the future
for success. Models Design
This process ensures banks can not only respond to current market
demands but also proactively shape their future in the banking
industry. Each step is designed to build upon the previous, creating Select suitable List future business
Models model options
a robust framework for continuous adaptation and sustained value
creation in the evolving financial sector.

Determine a
Undertake
shortlist to
Pilots
experiment

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 3

Scaling Organization
Capabilities to Drive
Continuous Innovation

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 #1 Target business model
Rethinking the business
Customer Segment | Value propositions | Channel mix |
model for digital era
Revenue Streams| Cost structure

#2 Scaling organization
capabilities to drive People and Culture Agile processes Technology and Data
continuous innovation

#3
Rapid creation and
Product and Services Channel and CX Ecosystem
delivery of new value

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 “The new business model that we are also trying to pilot is product management. For example,
create value streams for cards business, consumer lending, embedded finance and others.
Value streams that will have the required resources to run the business and grow the business.
Working on their day-to-day operations, but also implementing the initiatives they need
to grow their business. That means we should have all the required components securely
allocated from technology, business, line of defense and support units“

Harris Mygdalis, Chief Digital Officer, Eurobank, Greece

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 3.1 People and culture Tech

The people and culture pillar, while challenging, is pivotal for building resilient, Org design
scalable organizations that drive ongoing innovation. This requires a holistic approach
where a clearly defined purpose and mission centered on customer-focused goals
align teams, with incentives and metrics rooted in customer-centric outcomes. Many Way of working
digital banks now link incentives with these outcomes across roles, which is crucial
for success in fintech partnerships and embedded banking solutions. Agile models
in banking further empower teams by pushing decision-making to the front lines,
Empowerment
enabling rapid responses to real-time customer needs. Advanced Gen AI tools are
revolutionizing productivity and collaboration, accelerating project timelines and
elevating outcomes. To increase responsiveness, banks are also shifting toward cross-
functional teams organized around customer outcomes, which facilitates smoother Incentives & metrics
collaboration with tech partners. Finally, modern developer portals, APIs, and
sandboxes enable scalable, efficient partnerships, empowering banks to co-create
solutions with technology innovators. Purpose & Mission

Source: 11:FS report: ‘Rebuilding financial services from the inside’

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 Innovation Case Studies

Organization culture

Fostering Intrapreneurship: Upskilling and Reskilling:  ostering a Tech Community of

F
Employees:
Encouraging employees to think like Providing continuous learning
entrepreneurs within the organization, opportunities to help employees Creating a collaborative environment
fostering innovation from within. Example: develop new skills and stay current with where employees can share knowledge
In Portugal, Novobanco’s Innovation technological advancements. Example: and work together on technological
& Talent Lab is revolutionizing the In Hungary, MBH Bank launched ‘AIDA’, innovations. Example: TBC Bank in
future of work, fostering a culture of along with in-depth training modules Georgia has setup a Tech Community
intrapreneurship, empowering people and a dedicated power user community, project aims to create a close-knit
to securely test & develop new business helping employees prepare to excel in a tech community within TBC Bank,
opportunities, where employee insights future shaped by AI - starting from the focusing on employee engagement,
fuel groundbreaking innovations. basics. development, and effective
communication.

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 “The same transformation program or same platform being deployed into two different
organizations can yield to very different results. If you roll out a platform across a large
organization, two organizational units might result in very different performance uplift
and the reason behind that is the leadership ability to learn, adapt, and understand their
processes. It includes everything from how we make decisions and how sustainable the
investments are to how we set KPIs and measure and monitor them to how leaders stand in
front of their staff and actually encourage them to adopt and accept this new technology.
So without this adoption capability within the organization, it is very difficult to become
frontrunners, and this is a skill that is practiced over time.”

Majid Muhammad, Chief Information Officer, Resimac

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 “The key to success is having the ability to listen to your customers. We put so
much premium on customer centricity and on providing a delightful customer
experience. In any digital transformation journey, it’s not just about technology;
it’s about mindset, culture, and people.“

Lito Villanueva, Executive Vice President, Chief Innovation & Inclusion

Officer, RCBC

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 3.2 Agile Processes

For better operations, banks must adopt a holistic approach, balancing internal focus with external
customer-centricity. This requires re-imagining five key pillars: business strategy realignment, smart
processes, workforce modernization, technology advantage, and strategic governance. These pillars
shift focus from value maintenance to value enhancement, ensuring effective, customer-driven
operations.

1. Strategic Alignments
Business models | Customer segments | Products and services | Channels mix

2. Smart Processes 3. Augmented Workforce 4. Technology Advantage

Customer-centric design Workforce transformation Digital-first platform

Digital-first operations Work digital-augment Continuous evolution
Ubiquitous automation Workplace reset Cloud based consumption

5. Strategic Governance
Risks management | Regulations & compliance

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 Innovation Case Studies

Digitization, automation and workforce augmentation

Digitization of Manual Processes: Simplifying Processes through Virtual Robot Colleagues:

Digitization:
Converting manual processes into digital Integrating intelligent automations
formats to increase speed and accuracy. Streamlining complex procedures using and AI-driven colleagues to support
Example: Leveraging OCR and proprietary digital tools to make them more user- employees in their daily tasks and improve
image matching algorithm, HDFC friendly. Examples: Bradesco identified efficiency. Akbank’s “Robots” are new
revolutionized invoice, image and delivery customer issues with taking credit, technological colleagues integrated
order processing in Consumer Durable enhancing their app to simplify credit them into employee lives to achieve
Loans. processes, making products accessible, strategic workforce management, faster
simplifying contracts and enhancing compliance with legal and regulatory
personalization requirements, operational excellence and
most importantly, increased customer and
employee satisfaction.

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 “It’s not only important to offer products and services digitally, we also must
simplify and digitalize the internal processes of the bank triggered from any
customer contact across channels. The credit side, the operations side and others.
Offering a product or a service digitally along with lean and digitalized processes
internally makes a bank digitized to the core”

Harris Mygdalis, Chief Digital Officer, Eurobank, Greece

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 3.3 The Imperatives for Banks in a
Rapidly Evolving Tech Landscape

A major imperative for banking executives has been navigating the

surge of modern technologies that unlock new opportunities.

Banks must also navigate the different pace and stages of technological
evolution: while new technologies like generative AI and Web 3.0 are
emerging, established technologies such as cloud and APIs continue to
mature.

This creates a dynamic landscape where banks must balance innovation

and operational stability. On one side, there’s room for experimentation
with cutting-edge solutions, while on the other, there’s an urgency to
accelerate the adoption of proven, mainstream technologies.

In both scenarios, a robust architectural foundation becomes crucial for

maximizing the benefits of these innovations. Without this, banks risk
underutilizing the potential of both new and maturing technologies.

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 In our survey, when banking executives were asked about their
success in leveraging technologies to create, deliver, and realize
better value, cloud computing and open APIs emerged as the
most successfully adopted technologies. Over 40% of banking
executives reported that their initiatives (partially or fully
deployed) in these areas are delivering results as expected. This
reflects the industry’s increasing reliance on cloud for scalability,
flexibility, and cost-efficiency, and on APIs for enabling
ecosystem partnerships and enhancing service delivery.
However, this success rate also highlights that even with mature
technologies, banks have significant room for improvement,
requiring continued resources and investments.

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 Open APIs 57.20% 42.70%

Cloud computing 58.80% 41.30%

Artificial Intelligence 68.80% 31.20%

Blockchain 80.20% 19.80%

Internet of Things (IoT) 80.60% 19.30%

Immersive media (AR/VR/Metaverse) 85.00% 15.00%

Proximity tech (Beacons, RFiD, NFC) 80.80% 19.20%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00%

% of banking executives that have deployed initiatives (limited / partial / significant) that are not delivering as per expectations
% of banking executives that have deployed initiatives (partially or completely) that are delivering as per expectations

Indicates top 3 areas where banking executives have Indicates top areas where banking executives have
deployed initiatives (partially or completely) that are deployed initiatives (limited / partially / completely)
delivering as per expectations that are not delivering as per expectations

Source – Infosys Finacle and Qorus Innovation in Retail Banking Research 2024

54 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.

 Artificial intelligence (AI) ranked third, with just delivering as expected. This is largely due to the nascent
over 30% of banking executives stating that their AI nature of these technologies and the limited scale of
initiatives are delivering expected outcomes. While AI deployments, with over 50% of banking executives
adoption is growing rapidly, banks are still in the early having only tested these solutions on a smaller scale.
stages of fully leveraging its potential across use cases For these technologies, the banking industry stands at
such as predictive analytics, personalized offerings, and the crossroads of exploration and real-world application.
risk management. Banks need to prioritize investments Banks must approach these innovations with a clear
in data quality, AI governance, and talent, to drive use-case-driven mindset, investing in pilots that are
meaningful AI-led transformations. aligned with business goals and customer needs, while
also staying flexible to pivot based on early learnings.
Emerging technologies like blockchain, the Internet
of Things (IoT), immersive media (AR/VR/Metaverse), These insights provide a valuable benchmark for
and proximity technologies (Beacons, RFID, NFC) are banking executives on where and how much to invest
still in the experimental phase for most banks. More in these technologies, taking into consideration their
than 80% of banking executives who have deployed own position in the technology adoption journey.
initiatives in these areas report that they are not

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 3.3.1 Cloud Adoption: Current Adoption Rates Across Key Banking
Applications

Cloud adoption is now a mainstream strategy in banking, with institutions moving past the exploratory phase to focus on scaling
deployment for maximum impact. While the advantages of cloud—agility, operational efficiency, scalability, and innovation—
are widely accepted, the cloud adoption journey is nuanced across application areas influenced by specific operational needs,
regulatory concerns, and the complexity of legacy systems.

Core Banking: A Stronghold for Private Cloud

With 43% of banking Hybrid cloud, preferred The relatively low 25.4% are yet to adopt
executives opting for by 16.5% for adoption, is adoption of public cloud any cloud model. As
private cloud, this model gaining ground for banks and SaaS (less than cloud-native solutions
provides the control, seeking the flexibility to 10%) signifies a cautious mature and regulations
security, and governance scale operations without approach largely due evolve, we may see greater
required for a bank’s fully committing to to concerns about movement towards
most critical systems. public cloud. data sovereignty and hybrid and public cloud
regulatory complexity. models.

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 Cloud Adoption: Current Adoption Rates Across Key Banking Applications

Private cloud Public cloud SaaS Hybrid Yet to adopt

Core banking 43% 5.80% 8.30% 16.50% 26.40%

Data lake, analytics, and AI 35.70% 8.70% 6.10% 20% 29.60%

Loan origination 27.90% 11.50% 14.80% 18.90% 27%

Digital channel suite 25.60% 13.20% 14% 22.30% 24.80%

Payments 25% 7.50% 15% 26.70% 25.80%

Wealth management 19% 8.30% 12.40% 14% 46.30%

CRM 31.70% 10% 10% 15% 33.30%

Loan servicing 25.20% 9.20% 14.30% 22.70% 28.60%

■ Indicates top preferred cloud hosting model for the banking application area

■ Indicates second preferred cloud hosting model for the banking application area

■ Indicates top two banking application areas where public cloud and SaaS are most preferred

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 Loan Origination and Servicing: SaaS Gains Traction

Around 25–27% banking executives have Interestingly, SaaS adoption is higher in this As competition intensifies in lending,
adopted private cloud, with the need area (14%) compared to other applications, SaaS and public cloud models (currently
for secure, streamlined processes that suggesting that banks are warming to the at 9–11%) are expected to gain traction,
can handle large volumes of transactions idea of cloud-based solutions for improving enabling banks to leverage the latest in
while ensuring compliance. Hybrid cloud customer experiences and loan processing automation and AI-driven underwriting
adoption is favored by 18–22%. efficiencies. models.

Digital Channel Suite: Balancing Resilience and Innovation

Private cloud leads with adoption rate of The adoption of public cloud (around 13- While 24.8% of banks have yet
25.6%, providing a controlled environment. 14%) and SaaS solutions (13%) is higher to adopt cloud, the shift towards
Hybrid cloud at 22.3% offers a balance compared to core banking, driven by the embedded banking and omni-channel
between on-premise control on data & need for agility and rapid innovation in the experiences is likely to accelerate
transactions, and public cloud scalability for space. adoption.
handling peak traffic.

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 Payments: Real-time Nature of Payments Drive Hybrid Adoption

Over 26% banking executives have opted for hybrid Private cloud is similarly popular, Interestingly, SaaS adoption is also on
cloud. The real-time nature of payments and the reflecting banks’ need to maintain SaaS adoption is also preferred by
need for seamless integration across networks make control over this essential function. 15% banks, signaling a growing trend
hybrid cloud an ideal solution, offering flexibility and toward cloud-based payment solutions
scalability without compromising security. that offer agility and cost efficiency.

Wealth Management: Nature of Business Slows Adoption

Remains an area of slower cloud 19% of respondents favor private cloud As wealth management firms seek to enhance client
adoption, with 46.3% of banking for wealth management, with hybrid experiences through AI and analytics, we may see an
executives yet to deploy any cloud (14%) and SaaS (12.4%) also uptick in hybrid and SaaS adoption, especially for
cloud model. showing traction. personalization and robo-advisory services.

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 CRM: Need for Security and Personalization at Scale Drives Private Cloud Adoption

With 33.3% yet to adopt cloud for CRM, The ability to securely manage vast Hybrid cloud, favored by 15%. Public cloud
there is significant potential for growth amounts of customer data while delivering and SaaS each at 10% adoption rate, reflect
as banks increasingly rely on AI-driven personalized experiences makes private banks’ willingness to use these models for
insights to enhance customer experiences cloud adoption at 31.7% a natural choice less sensitive aspects of CRM

DataLake, Analytics, and AI: Complexity and Privacy Concerns Drive Private
Cloud Adoption

Private cloud adoption is relatively Hybrid cloud (20%) is Public cloud (8.7%) and SaaS (6.1%) adoption remains low, likely
strong at 35.7%, reflecting banks’ second-most preferred due to the complexity of migrating vast data sets and ensuring
need to maintain control over vast model, as it provides the data privacy. Nearly 30% of banks are yet to adopt cloud
datasets and ensure compliance with flexibility to process data adoption for these functions, highlighting the vast potential for
data privacy regulations across environments. growth in this area.

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 “I think hybrid cloud is the way to go. It allows you easier step into cloud computing
realm, whether it’s an on-prem, private, or public cloud. In a private and public cloud
approach, you could have a private cloud for data residency, but you can off shoot the
processing to public clouds. I also like private cloud concept in hybrid because that’s
where operational stability and efficiencies can be built in for main business processes
and by using public aspects of it you can do quick development, agile innovation and
other processing at lower cost, paving more robust way to get into market.”

Boe Hartman, Co-Founder and CTO, Nomi Health, Ex-Goldman Sachs

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 “It hasn’t been that long since when we used to see announcements being
made by the large players in the industry about a billion-dollar program of either
implementing a platform or to unify existing ones or to upgrade them. That scale
of investment is outside of the reach of 90% of players within the industry. But
cloud has democratized that problem. Many organizations can now access that
capability on a SaaS basis which previously some of the large players were having
to implement with those large investment programs in place.”

Majid Muhammad, Chief Information Officer, Resimac

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 “We identified two major difficulties to overcome on our cloud adoption journey:
treating the cloud not just as an IT project but as a strategic initiative that affects
the entire organization and recognizing the need for new operational models
and interactions between business and IT, including extensive training and new
roles. To address these, we implemented a clear strategy for cloud migration that
not only addresses the total cost of ownership of the infrastructure, but also the
benefits in terms of time to market and innovation capacity.”

Renata Talarico Petrovic, Head of Innovation, Bradesco

63 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.

 3.3.2 AI-Driven Priorities in Banking: Customer Engagement and Operational
Efficiency Reign Supreme
As banks increasingly deploy innovation investments, their priorities are becoming clear—focusing on areas where the impact on business outcomes and customer
engagement is most direct. The survey results point to a future where AI investments will become increasingly balanced across all areas of the bank, with particular
emphasis on customer engagement, operational efficiency, fraud management and data-driven insights.

of banking executives ranked customer Operational efficiency emerged as the second-

engagement among their top three areas for highest priority, This has to be 57% banking
AI investment. Looking ahead, this trend is executives ranking it among their top three areas
likely to intensify as banks increasingly adopt for AI investment. This is unsurprising given the
AI for predictive analytics, enabling more immense potential of AI to streamline processes,
proactive customer engagement through reduce manual interventions, augment
offers, services, and solutions based on workforce effectiveness and enable predictive
real-time behavior patterns. Banks will also maintenance. As banks push to become leaner,
leverage generative AI to deploy conversation more agile organizations, AI investments in this
bots and agentic AI tools to elevate customer area will become integral to building resilient
engagements. and scalable operations.

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 Tied with fraud management, analytics Banking executives ranked fraud management in
and insights were ranked among the top their top three, it’s evident that AI is becoming an
three AI investment areas by 51% of banking essential tool in detecting and mitigating fraud.
executives, underscoring the critical role of Going forward, banking executives can expect
data in shaping future banking strategies. to see more investment in machine learning
Future trends will likely focus on expanding models that can detect new, previously unseen
AI’s role in predictive analytics and prescriptive fraud patterns, along with AI-powered behavioral
insights, where banks can not only analytics that can adapt to emerging threats. The
understand what is happening in real-time importance of AI in fraud management will only
but also anticipate future trends and customer grow as cybercrime becomes more advanced and
as banks increasingly rely on digital platforms.

Risk management remains a key focus area for AI investments, with 49% of banking executives ranking it in their top three. AI is helping banks refine their risk models, ensure
data-driven decisions, mitigate operational and credit risks, and ensure compliance with evolving regulations.

Surprisingly, only 23.2% of banking executives ranked IT engineering among their top three investment areas. This may indicate a hesitation to heavily invest in AI for core IT
functions, potentially due to the complexity of integrating AI within legacy systems. However, as digital transformation accelerates and banks move toward more cloud-native,
agile infrastructures, we can expect to see AI investments in IT engineering rise.

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 AI-Driven Priorities in Banking
% banking executives
that ranked top 3

IT Engineering 23.2%

Risk Assessment 49.1%

Analytics and insights 51.8%

Fraud detection and security 51.9%

Operational efficiency 57.1%

Customer Engagement 66.9%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

1 2 3 4 5 6

Source –Infosys Finacle and Qorus Innovation in Retail Banking Research 2024

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 “Artificial intelligence is a broad concept of which large language model is one. It also includes
everything from expert systems through to machine learning through regression analysis to vision
and audio systems. The possibilities that AI brings to an organization are limitless. Questions we
should be asking ourselves are whether there are assumptions within our corporate strategy
around cost leadership around channels around customer value proposition around customer
segments that we have resumed based on what we think we can do that are now fundamentally
changed as a result of artificial intelligence not being introduced. So that’s what I suggest AI
adoption approach would start with and from that point on a comprehensive change would need
to be delivered to truly take advantage of.”

Majid Muhammad, Chief Information Officer, Resimac

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 “We’re going to see a world where financial institutions are leveraging
technologies like generative AI to improve customer satisfaction, improve
operations, and create a symbiotic relationship between a human banking
executives and AI, resulting in better value for the organization and the client.”
Imtiaz Adam, Founder at Deep Learn Strategies “The real trick is going to be who
can use the creative side of generative AI to create new value propositions, new
ways of engaging with customers and delivering experiences.”

Tony Moroney, Co-Founder at The Digital Transformation Lab

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 “An AI-first organization requires a complete reorganization of databases
and internal/external APIs in order to empower a data-driven structure.
AI and machine learning have been adopted widely for modelling and
automating processes for a while now, and there is an intense test, learn and
adopt movement of generative AI in different initiatives.”

Renata Talarico Petrovic, Head of Innovation, Bradesco

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 3.3.3 Need for a Modern Architecture

For banks and financial institutions (FIs) to thrive in today’s evolving Where Banks Hold Steady: Security, Scalability, and Resilience:
environment, they must adopt modern technology platforms that
In the areas of security, scalability, and resilience and recovery,
enable them to transform with speed, scale, and resilience. These
more than 50% of banking executives believe they are on par with
platforms must be capable of meeting the rapidly emerging demands
the industry but not better than others. These areas tend to be
of digital banking, from enhanced customer experiences to real-time
more mature in banking, given their foundational importance to
services.
operational integrity and regulatory compliance. However, while
In this context, we asked banking executives to evaluate their banks are maintaining standards, they face challenges in advancing
institutions’ application architecture maturity against modern beyond basic requirements to truly differentiate themselves in these
architectural principles across key tenets, including scalability, security, critical areas. The focus has largely been on mitigating risks rather
modularity, interoperability, cloud-native adoption, data management, than driving innovation, which may explain why few banks consider
analytics and AI, CI/CD, resilience and recovery, and sustainability themselves leaders here.
practices. The findings reveal that fewer than 1/5th banking executives
believe their architecture is best-in-class across these tenets.

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 Bank’s Application Architecture Maturity vis-à-vis Modern Architectural Principles

Best in class As good as others but not better Not as good as others No opinion

Scalability 9.10% 56.20% 28.10% 6.60%

Security 23.30% 59.20% 14.20% 3.30%

Resilience and Recovery 16.10% 58.50% 19.50% 5.90%

Modularity 14.50% 43.60% 35.90% 6%

Interoperability 14.20% 40.80% 39.20% 5.80%

Cloud-Native Adoption 16% 38.70% 36.10% 9.20%

Data Management, Analytics, and AI. 11% 39% 40.70% 9.30%

Continuous Integration/Continuous
8.40% 36.10% 47.10% 8.40%
Deployment (CI/CD)

Sustainability Practices 16.80% 38.70% 31.90% 12.60%

Indicates top 3 areas where banking executives believe they are as Indicates areas where banking executives believe they are not as
good but not better than others good as others

Source –Infosys Finacle and Qorus Innovation in Retail Banking Research 2024

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 Areas Lacking Confidence: Modularity, Interoperability, and Cloud The Path Forward for Banks:
Native Adoption:
To succeed in the digital era, banks must prioritize a complete
In the areas of modularity, interoperability, cloud-native adoption, data reimagining of their application architecture. This means embracing
management, analytics and AI, CI/CD, and sustainability practices, modularity and interoperability to support rapid innovation and
confidence dips significantly. Between 35% to 45% of banking executives integration with external services, adopting cloud-native technologies
believe they are only as good as others, while a similar percentage admit for scalability and flexibility, and leveraging data management,
they are not as good as their peers. These areas require more dynamic analytics, and AI for enhanced decision-making. At the same time,
and forward-looking architectural capabilities, which can be difficult for focusing on security, resilience, and sustainability practices will ensure
banks to develop and maintain. The rapid rise of fintech competitors, that banks remain safe, compliant, and future-proof.
the demand for seamless integration with external services, and the
In conclusion, modernizing application architecture is no longer
need for real-time, data-driven decision-making have highlighted
optional—it’s a critical enabler of long-term success in the banking
the limitations of many banks’ existing systems. Furthermore, cloud
industry. Banks that invest in developing best-in-class architectural
adoption and sustainability practices often require deep organizational
capabilities will not only meet the demands of today’s digital banking
commitment and significant resource allocation, which many banks are
landscape but will also be well-positioned to lead in the future.
still hesitant to fully embrace.

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73 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.
 4

Rapid Creation and

Delivery of New Value

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75 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.
 #1 Target business model
Rethinking the business
Customer Segment | Value propositions | Channel mix |
model for digital era
Revenue Streams| Cost structure

#2 Scaling organization
capabilities to drive People and Culture Agile processes Technology and Data
continuous innovation

#3
Rapid creation and
Product and Services Channel and CX Ecosystem
delivery of new value

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 4.1 Innovation Across products and Services:
Assessment of Competitive Landscape

For some years now, non-banks have led banking innovation in certain product and
service segments, redefining the way value is created and delivered. Respondents
to this year’s survey said that leading consumer technology companies would
continue to dominate innovation in payments and cards by 2030.

But overall leadership in product and service innovation seems to rest with
incumbent financial institutions who, according to the banks surveyed, will
dominate innovation in wealth management, lending, as well as in accounts &
deposits. However, unlike in payments, where consumer tech companies are
expected to clearly dominate in the future, in both lending and accounts & deposits,
there is a fairly strong challenge to incumbent institutions from challenger banks in
particular, and to a lesser extent, from fintech startups.

Today’s competitive landscape is layered, evolving, with players capitalizing on

different strengths to corner their part of the market.

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 Innovation in Products & Services: Assessment of Competitive Landscape

Incumbent Challenger FinTech Leading consumer Leading digital businesses Big brands from other
financial banks start-ups technology companies (such as Amazon, Uber industries (retailers /
institutions (such as Apple, Google) and Alibaba) telcos / insurers)

Overall 27.60% 16.40% 22.40% 17.20% 12.10% 4.30%

Lending 27.60% 20.30% 16.30% 12.20% 16.30% 7.30%

Accounts and deposits 38.30% 28.30% 17.50% 6.70% 5.80% 3.30%

Wealth management 38.70% 21.80% 26.10% 4.20% 3.40% 5.90%

Payments 10.60% 15.40% 16.30% 37.40% 16.30% 4.10%

Cards 23.10% 17.40% 9.10% 32.20% 10.70% 7.40%

Non-traditional products 7.60% 17.80% 33.90% 17.80% 17.80% 5.10%

% represents the proportion of banking executives who believe that the entity will be at the forefront of innovation in each respective business line by 2030.
Indicates the top player perceived to be at the forefront of innovation for the product line
Indicates the top 3 players perceived to be at the forefront of innovation for the product line

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 Payments: The survey found that in the opinion To get there, banks, especially those trapped
of 37.4 percent of respondents, large consumer within legacy systems and processes, will need
tech firms, such as Apple and Google, will lead to upgrade to a composable payments platform.
innovation in payments, followed by fintech A composable payments platform will bring
startups (16.3 percent) and leading digital functional harmonization and standardization to
(platform) businesses such as Amazon, Uber, and the payments business, and several advantages
Alibaba (16.3 percent). Incumbent banks must on the technical side, namely services composition,
catch up with the leaders in payments innovation component reusability, interoperability, modularity,
if they hope to capitalize on the big opportunities API-centricity, and standards-based integration.
in this space, such as real-time payments, which These features will enable banks to deliver highly
according to different estimates could touch innovative payment solutions, collaborate better
between USD120 million and USD190 million+ by with ecosystem players, and embrace new
2030; global cross-border payments which will business models. Emerging models like embedded
surpass $300 billion by 2030; and Central Bank payments, non-financial marketplaces, payments
Digital Currencies, whose transaction value is as a service, and payments data monetization will
expected to grow by a mammoth 260,000 percent be crucial in improving the typically low profitability
between 2023 and 2030. of this business.

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 Payments: Innovation Case Studies

Empowering internal teams Enabling clients with personalization and Tapping into the strengths of ecosystem
configuration options partners
An Australian-first innovation Westpac
SaferPay alerts customers to potential VakıfBank is the second largest bank in Turkey in terms Standard Chartered Bank, in a regional
scams through questions presented for of asset size. The bank created ‘Benim Yerim’ to enable partnership with Visa, is offering credit
new payments detected to have high customers to track payments from a single screen, card customers in Asia Pacific a Buy Now
scam risk. If the responses suggest it receive notifications as payment deadlines near, and Pay Later facility that allows them to split
is likely to be a scam, Westpac will not personalize their experience with their own information. their payments for purchases made at
process the payment. customers can add their home and vehicle information participating physical and online stores
to VakıfBank Mobile. By this means, they can keep track right at the point of purchase.
TD Bank is among the first large U.S.
of their bills, rent, dues, loans, money transfers, Motor
banks to debut Tap to Pay on iPhone,
Vehicles Tax (MTV), traffic fines and Fast Pass System
a secure mobile-based payment
(HGS) expenses on a single screen. Moreover, tabs such
acceptance option that offers greater
as Health, Education, Travel and Personal Payments can
flexibility and convenience to small and
also be easily accessed from the Benim Yerim menu.
micro businesses.

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 Lending: Although no single player is perceived to dominate solely over others in
the lending space, banking executives in our survey believe that incumbent banks
(27%), challenger banks (20%), fintech companies, and leading digital businesses
like Amazon, Uber, and Alibaba (each at 16%) will all play significant roles in leading
innovation in the lending space by 2030. This means that while incumbent banks are
still seen as strong players, they will continue to face substantial competition from
challenger banks, fintechs, and major digital businesses in this sector. This situation
underscores the pressure on banks to continuously elevate their value propositions.
We believe banks need to take a first principles approach to

■  uild customer-centric propositions: Create digital platforms offering instant

B
access, configurable products, and hyper-personalized offers.

■  rive continuous innovation: Use APIs for collaboration, expanding offerings like
D
marketplace lending and syndicated products.

■  perate at higher efficiencies: Implement paperless operations, reduce human

O
intervention, and enhance transparency through automation.

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 Innovation Examples in Lending

Empowering internal teams Enabling clients with personalization and Tapping into the strengths of ecosystem
configuration options partners
Bancolombia is one of the largest banking
groups from Colombia. Recognizing that Marcus, a brand of Goldman Sachs, benefits UnionBank of the Philippines, one of the top
blue-collar workers often need a small from the firm’s 147-year history of financial 10 banks in the country, has partnered with
loan to tide them over at the end of the expertise, risk management, and customer Samsung Finance+ to offer pre-approved
month when finances run low, Nequi, the service. One of the first products from loans for millennials buying Samsung
digital bank of Bancolombia, introduced an Marcus is a fixed-rate, no-fee unsecured products. By integrating Telco scores into
end-of-month, pre-approved unsecured, personal loan that enables customers to its credit decisioning tools, UnionBank can
digital loans micro loans. The Bank piloted tailor their monthly payment options to expand its reach and provide instant credit
a “Lifesaver Loan” from Nequi for amounts fit their schedule and budget. The bank lines. Customers use Samsung’s app in-store,
between COP 100.000 and COP 500.000, and delivers extensive self-service capabilities on enter basic info and select a gadget, with
a maximum repayment period of one month. digital channels to design truly personalized the application linked to UnionBank’s eKYC
The loan, which requires no documentation, products. The system will give end- and loan processes, enabling instant loan
co-debtors or guarantees, is credited within 5 consumers the flexibility to choose lending approval for gadget purchases.
minutes through the Nequi app. terms such as repayment amount and
tenure.

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 Innovations & Case Studies in Deposits
Deposits: Incumbent institutions are the clear leaders in this space, but as mentioned earlier, are facing a mounting challenge from challenger banks and fintech startups.
Still, banks must be careful not to slow down the pace of innovation, capitalizing on every opportunity to innovate within the organization, in partnership with other
providers, or jointly with customers.

Empowering internal teams Enabling clients with personalization and Tapping into the strengths of ecosystem
configuration options partners
Game on Deposit is a one-of-its-kind gamified
fixed deposit by Liv, which is a digital-only Apple and Goldman Sachs envisioned something very Hatton National Bank’s HNB Fitness App
bank powered by Emirates NBD, a leading revolutionary: a savings account offering a market- unites banking with the lifestyles, incentivizing
banking group in MENAT. The innovative leading annual percentage yield (APY) of 4.40%, with customers to consistently lead a healthy life |
deposit allows customers to secure the no fees or minimum balance or deposit requirements. Customers that achieve their health goals will
market’s highest interest rate by predicting This account would automatically funnel cash rewards get up to 8% additional interest.
the winners of sports tournaments. To from the card or wallet into savings, while also allowing
participate, customers only need to select the consumers to deposit funds from other linked accounts,
team they think will win the tournament while all while earning an impressive return. The funds in the
opening the deposit. If their selected team savings account could be used for any purchase, not
wins, they earn 10% p.a. interest. If it reaches just those related to the company’s devices, with reward
the semi-finals, they receive 5% p.a. interest. If percentages varying based on the type of purchase. For
neither, they still earn a 2.3% p.a. interest. withdrawals, consumers would simply link their bank
account to access their cash.

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 Wealth Management: Innovations and
Case Studies

According to 38.7% of banking executives, incumbent banks are expected

to maintain their innovation leadership in wealth management by 2030.
This confidence likely stems from their established customer base, robust
resources, and the ability to integrate new technologies with existing
infrastructures. Meanwhile, FinTech start-ups and challenger banks are
seen as equally strong innovation leaders by 26% and 21% of executives,
respectively, due to their agility, customer-centric approaches, and focus
on niche innovations that challenge traditional models. The interplay of
incumbents leveraging scale and new players driving specialized innovation
is shaping the competitive landscape in wealth management.

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 Empowering internal teams Enabling clients with personalization Tapping into the strengths of ecosystem
and configuration options partners
After a recent technology
modernization, HDFC bank is facilitating DBS digibank, being a digital first Emirates NBD has partnered with more
innovation, both within the internal proposition in India enables customers than 15 insurance providers across
ecosystem as well as with external to open a wealth account in a jiffy, create conventional and Islamic banking entities
partners. The application offers over a personalized risk profile, and purchase, to offer Bancassurance - to manage
350+ APIs for seamless integration track and redeem mutual fund on the the insurance portfolios of its existing
enabling digital teams to effectively go. Mutual fund investment plans are customers financially. Leveraging
support the evolving needs of the provided by DBS Bank and include Bancassurance, the bank offers a
business. automated alerts or automated monthly complete range of insurance products
investments. and services, strengthening its product
portfolio and helping it to stand out from
the competition.

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 4.2. Channel and CX
With trends like open banking and embedded finance taking hold, banking transactions
are steadily moving out of bank channels to those of third-parties, such as brand partners,
ecommerce platforms, and various ecosystem participants. Even so, incumbent banks need
to reimagine their channels and customer experiences, not just to satisfy the customers
who continue to transact on their channels but also to be able to onboard them while
they are on their primary journeys, and participate in the earlier mentioned ecosystem
opportunities. Reimagination needs to happen in each of the four key stages in the
customer engagement lifecycle, namely, onboarding, conversing, servicing, and selling.

Need for a Comprehensive customer engagement strategy: Banks must align their
people, processes, and technology to create a cohesive engagement strategy. This strategy
should encompass traditional, contemporary, and emerging channels, ensuring customers
can interact with the bank seamlessly across various touchpoints. By executing this well,
banks can empower customers to manage their financial well-being more effectively,
enabling them to save, borrow, pay, insure, and invest with greater confidence.

The survey offers insights into where incumbent banks stand when it comes to innovation
in the above areas. Enhancing Core capabilities

Empowering deeper engagements across customer lifecycle

Engagements across channels

Alignment of customer financial well-being

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 Channels and CX:
Success Rate with Digital Engagement Strategies across Customer Lifecycle

Onboard Converse Service Sell

42.1% 32.5% 38.1% 48.4%

Providing tools for Next-best offers based on Seamless omnichannel Offering a full range of banking products
customer need analysis customer’s anticipated needs experiences and services on digital channels

42.8% 32.2% 29.0% 34.9%

Product simulation to Enabling automated actions Consent-based open banking Offering non-banking products and
visualize benefits (such as auto sweeps to access services
deposit a/c for idle balance)

47.2% 41.8% 35.8%

Product comparators Enabling your employees Servicing through third-party apps
with customer insights (example: embedded finance)

% indicates banking executives that have deployed initiatives (partially or completely) that are delivering as per expectations

Indicates top 3 areas where banking executives have deployed initiatives Indicates areas where banking executives have deployed initiatives
(partially or completely) that are delivering as per expectations (limited / partially / completely) that are not delivering as per expectations

Source – Infosys Finacle and Qorus Innovation in Retail Banking Research 2024

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 Channels and CX: Success rate with AI Applications across Customer Lifecycle

Onboard Converse Service Sell

64.8% 76.1% 75.6% 75.6%

Document verification and Advanced chat bot for Virtual assistants to handle routine Next-best offers for customers or
authentication natural, context-aware enquiries, FAQs and resolve issues relationship managers (RMs)
conversations

50.9% 39.4% 38.4% 57.3%

Predictive analytics for risk Real-time sentiment analysis Predictive customer support for Personalized marketing
assessment potential issues or service needs

49.1% 24.4% 20.7%

Chatbot to support Creation of customer support Dynamic pricing
onboarding process summaries

% banking executives indicating these AI applications have been successfully deployed

Indicates top 3 areas where AI applications have been successfully deployed Indicates areas AI applications have been least successfully deployed

Source – Infosys Finacle and Qorus Innovation in Retail Banking Research 2024

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 “Banks in Cambodia have also made considerable advancements in financial
inclusion by reaching out to the unbanked population through digital channels.
This has been facilitated by the widespread adoption of smartphones and the
internet, even in rural areas. The e-KYC (Electronic Know Your Customer) process
has been streamlined, making it easier for customers to open accounts and
access financial services even in remote areas in the country.”

Han Peng Kwang, Former Chief Executive Officer, Wing Bank, Cambodia

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 “We want to remain both a human and a digital bank, enabling us with flexibility
to solve our clients’ problems. So, there can never be a scenario where we are
either a digital-only bank or a human-only bank. There are some geographies
where mobile adoption is low, especially smartphones. Here, we will go with a
solution that works on a normal analog phone but also ensure that it works with
our physical branches or contact centers as well. So, we will always be an omni-
channel provider of services in many instances.”

Khomotso Molabe, Group CIO, Standard Bank

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 “Branches are being restructured to provide counseling and higher value-added
services, since digital channels such as the mobile app are becoming more powerful
for customers to manage their financial lives. Bradesco is also empowering an
additional channel of Bradesco Expresso, which consists of partnerships with local
stores for them to sell and give support to Bradesco’s products and services. Tools are
being developed to improve customer experience across different channels in order
to generate an omnichannel experience. In this sense, there are different initiatives
to explore open finance as a tool to generate better recommendations and improve
customers’ financial well-being. Finally, our mobile app is in constant transformation to
provide a better user experience and empower our customers to achieve their goals.”

Renata Talarico Petrovic, Head of Innovation, Bradesco

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 Customer Onboarding: Success rate with Digital Engagement Strategies
and AI led Initiatives

Asked to rate their success in improving onboarding through The encouraging news is that many banks have adopted
different means, the survey respondents said the following: 42.1 artificial intelligence technology – which is rapidly becoming
percent said they had partially or fully deployed initiatives for indispensable – in onboarding processes: 64.8 percent of
providing tools for customer need analysis, and the initiatives the banking executives surveyed said they were using AI
were delivering as per expectations; the percentage of for document verification and authentication; 50.9 percent
respondents who said the same thing about product simulation were using predictive analytics for risk assessment; and 49.1
to visualize benefits and product comparators was 42.8 percent percent confirmed their banks had deployed chatbots to
and 47.2 percent respectively. These figures indicate reasonable support onboarding.
progress, but they also say that there is more work to be done.

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 On-boarding: Way forward

The onboarding process is the first interaction a customer has For example, allowing customers to tailor their account types,
with a bank, making it crucial to ensure a frictionless and positive card preferences, and financial goals directly from the onboarding
experience. Banks should focus on digitizing the entire onboarding interface.
journey, ensuring customers can complete the process across all
With 80% of bankers agreeing that third-party applications
relevant channels—mobile, web, or even third-party platforms. This
will dominate banking transactions by 2030, banks need to be
eliminates the need for repetitive steps and ensures a smooth, unified
ready to integrate seamlessly with these platforms. This means
experience.
providing digital, instant onboarding on third-party channels such
Additionally, empowering customers during the onboarding phase as e-commerce websites, digital wallets, or other fintech apps.
by offering self-service tools is key. When customers feel in control of Additionally, banks should use the data gathered during onboarding
their financial decisions, they are more likely to build trust with the to offer contextual, real-time services based on customer behavior,
bank. Banks can achieve this by offering simplified, customizable preferences, and goals.
product options and providing customer-led, user-centric journeys.

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 Customer On-boarding - Innovation Case Studies

Emirates NBD Liv, the UAE’s fastest- UNO Digital Bank is revolutionizing Australian Military Bank, a digital
growing bank and the first digital-only banking in the Philippines. UNO’s community bank serving the needs
lifestyle bank, offers a seamless account seamless integration with the leading of the defense community members.
creation process that takes just minutes. e-wallet platform in the Philippines It enables its customers, no matter
All customers need is an Emirates ID enabled the incorporation of banking where they are stationed, to join
and a valid UAE mobile number—no services directly within the platform, and start banking anytime, from
paperwork, branch visits, or queues allowing users to open accounts anywhere, within minutes. With
required. Once registered, a free VISA in just one minute. This innovation automated ID verification and real-
debit card is delivered right to their helped UNO expand its reach, time checks, they can easily open
doorstep. particularly among the unbanked and savings accounts, deposits, and loans.
underbanked, tech-savvy population. This has led to a 116% rise in mobile
Impressively, 32% of UNO’s customers banking engagements.
are entirely new to banking.

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 Conversing: Success rate with Digital
Engagement Strategies and AI led
Initiatives
The quality of conversations throughout the customer relationship lifecycle
– marketing to acquisition to servicing to upselling – influences the quality of
engagement.

Unfortunately, banks’ progress with digital engagement strategies has not

been great here. Only 41.8 percent have deployed initiatives with expected
results for enabling employees with customer insights; the performance is
even more underwhelming when it comes to making next-best offers based
on customers’ anticipated needs (32.5 percent) and enabling automated
decisions, such as automatic sweep of idle balances to deposit accounts (32.2
percent).

AI is well-entrenched in some activities but not in others: a robust 76.1 percent

of banks use advanced chatbots for natural, context-aware conversations, but
only 39.4 percent employ it for real-time sentiment analysis.

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 Conversing: Way forward

Banks can improve customer engagement in the conversation stage by leveraging

advanced data and analytics to enhance their KYC capabilities. Implementing an
open-source enterprise data platform allows banks to aggregate and analyze data
from multiple sources, providing a comprehensive view of the customer. Offering
KYC as a service to ecosystem partners also boosts collaboration and customer
experience.

Additionally, banks should focus on delivering descriptive insights, such as account

aggregation and spend visualizers, along with diagnostic insights that identify
patterns in user behavior, such as missed payments or frequently used options.
Predictive insights, like anticipating penalties or defaults, can help banks offer
proactive financial advice and create nudges that promote healthier financial habits.

AI plays a crucial role in this process, using real-time sentiment analysis to facilitate
personalized conversations that drive customer engagement and financial wellness.

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 Elevating Customer Conversations: Innovation Case Studies

Novobanco is a major Portuguese universal Union Bank of India is one of the largest DBS is known to be one of the most
bank headquartered in Lisbon. The bank public sector banks in India. The bank successful digital banks in the world. The
revolutionized how clients update personal recently enhanced its digital presence bank revolutionized car loan servicing with
information by delivering a seamless with Union Virtual Connect (UVConn), the AI-powered Car Loan Digibot, offering
omnichannel experience. Our secure, user- offering 65 banking services in 7 languages 24/7 personalized assistance. It delivers
friendly solution allows clients to update via WhatsApp to over 487 million users. instant solutions, reducing wait times and
data remotely via eIDs or by uploading ID Additionally, Union Voice Assistant extends operational inefficiencies, while enhancing
documents, eliminating branch visits. This conversational banking by providing customer satisfaction. This innovation
boosts efficiency, enhances regulatory services through voice commands. alleviates strain on traditional customer
compliance, and deepens our understanding This conversational platform not only service channels, streamlining the entire
of clients. Over 10% of digitally active clients enhances customer service but also offers car loan journey for customers.
now update data each month, leading opportunities for cross-selling products and
to improved customer satisfaction and generating new leads.
significant operational cost savings.

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 Servicing: Success Rate with Digital
Engagement Strategies and AI led Initiatives
Today’s customers expect banking services to be accessible anytime, anywhere, on
their preferred channel. Providing superior service means offering a wide range of
personalized, consistent banking experiences, delivered quickly across both digital
and physical channels.

In servicing too, banks have made limited progress in innovation. Their best
performance is in creating seamless omnichannel experiences, servicing through
third-party apps, and providing consent-based open banking access; however, in all
cases less than 40 percent of respondents – 38.1 percent, 35.8 percent and 29 percent
respectively – had deployed initiatives partly or fully and secured results as expected.

On the bright side, 75.6 percent of banks had successfully deployed virtual assistants
to handle routine enquiries and FAQs, and to resolve issues. A smaller number of
banks had also successfully deployed AI for offering predictive customer support for
potential issues or service needs (38.4 percent) and creation of customer support
summaries (24.4 percent).

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 Servicing: Way forward

The bank should provide servicing experiences across traditional,

contemporary, emerging, and open banking channels for every type of
user—whether end customers, bank staff, external partners, or trusted
third parties.

Real-time account management and aggregation must deliver up-to-

date information without requiring branch visits. Leveraging chatbots
and AI-powered virtual assistants ensures 24/7 support, instantly
resolving queries without human intervention.

Additionally, banks must deliver contextual engagements at speed, with

customer-centric, intuitive user journeys that focus on easy navigation,
one-click actions, flexible workflows, and self-contained tasks for a
seamless experience.

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 “It is possible in our industry to generate a lot of volume and attract a lot of
customers using price as the only leverage but we are quite convinced in our
strategy that while you can attract customers on price you can’t retain them with
poor service and therefore customer service forms a critical part of how we think
about the life cycle of the customer”

Majid Muhammad, Chief Information Officer, Resimac

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 Servicing: Innovation Case Studies

İşbank, launched a Dialog application, The Standard Bank of South Africa is American Express united its design,
the first in a mobile banking application Africa’s biggest lender by assets with product, engineering, and analytics
in Turkey that offers the feature of footprint across 20 countries across teams for a multi-year mobile app
making voice and video calls and the continent. The Bank digitized its redesign, focusing on enhancing
messaging between branch employees banking services at its branches. The customer experience. The v7.0
and customers. Before this innovation bank saw 90% improvement in process app caters to Millennials and Gen
was introduced, customers and branches efficiencies across branches and Z, facilitating digital payments,
were using WhatsApp to do business. The Turnaround time on transactions (TAT) Membership Rewards use, and exclusive
bank was able to stop that interaction improved by over 40%. lounge access.
make both parties use a trusted channel.
Within a year, the application has
handled 3,850,000 interactions.

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 Selling: Success Rate with Digital
Engagement Strategies and AI led
Initiatives

When it comes to selling processes, banks have seen some success in

innovation initiatives aimed at offering a full range of banking products
and services on digital channels, with 48.4 percent of respondents
agreeing that their partly or fully deployed initiatives were delivering to
expectations; just about a third of respondents, 34.9 percent, said the
same about their efforts to offer non-banking products and services.

Comparatively, the deployment of AI applications has seen better results:

75.6 percent of respondent banks have successfully deployed next-best
offers for customers or relationship managers (RMs), while 57.3 percent
are using AI for personalized marketing and 20.7 percent to execute
dynamic pricing.

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 Selling: Way forward

To enhance their selling proposition in customer engagement, banks

must adopt a holistic, multi-channel approach. At branches, they should
transition from transactional services to advisory-driven interactions,
empowering staff with real-time customer insights and AI-driven
recommendations.

On digital channels, personalized experiences are key—leveraging

data analytics and AI to offer contextual, tailored solutions that meet
customer needs in real-time.

Additionally, banks should explore new revenue streams by collaborating

with ecosystem partners. This enables innovative business models such
as embedded banking, subscription-based services, and marketplace
banking, driving both customer value and increased revenue
opportunities.

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 Selling: Innovation Case Studies

By combining a 360° customer view with In the annual report for 2023, DBS reports RCBC Pulz was conceived to provide underbanked
omnichannel interactions on an adaptable to have expanded heir consumer finance and unbanked Filipinos belonging to the mass
cloud platform, Postbank empowers business by working with 11 ecosystem affluent segment an access to a digital banking
employees to excel in a dynamic partners in various markets outside solution that corresponded to their need for
environment. This drives growth through Singapore. They include Kredivo, JD.com convenient access to high-quality banking. By
superior customer experiences that are and Cred. The volume of loans disbursed transforming RCBC Pulz into a digital concierge,
personalized, data driven decisions, and across these markets grew 118% to SGD this ensured that mass affluent Filipinos had a
employee agility enabling their staff to 3.4 billion. hyper personalized experience. Since its relaunch as
adapt to changing regulations, market RCBC Pulz, the digital solution saw a 27% surge in
trends, and customer needs. The gamified transaction volume and 34% increase in transaction
elements enhance staff motivation, driving value. For interbank transactions powered by
growth, customer loyalty, and improved Instapay, RCBC saw a 33% increase in transaction
sales performance. value and a 31% increase in transaction volume.

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 4.3 Navigating Innovation in Evolving Banking Ecosystems: Successes,
Challenges, and New Roles

As banking ecosystems continue to evolve, ecosystem innovation On the flip side, banking executives highlighted challenges in
has become a critical metric of success. We asked banks to assess deploying initiatives in non-traditional products (73.5%), wealth
our organization’s progress and effectiveness in fostering an management (70.3%), and cards (60.2%), where innovations have
innovative ecosystem, and the results reveal key trends. According fallen short of expectations. Several factors may contribute to
to respondents, the top three product lines where banks have these difficulties. Non-traditional products often involve unfamiliar
deployed initiatives that are delivering on expectations include or emerging technologies, making the path to successful
accounts and deposits (49.2%), payments (45.9%), and lending innovation less clear. Wealth management, a high-touch,
(42.7%). These areas have traditionally been the core of banking relationship-driven service, poses complexities in digitization,
services, making them more mature, predictable, and thus more and achieving the same level of personalization and trust can be
likely to yield positive results when innovation is applied. Banks challenging. Similarly, cards, while long-established, are facing
have a long history of refining processes in these areas, and disruption from new payment methods, causing uncertainty in
customer familiarity with these products creates a lower barrier to how to innovate effectively in this space.
successful implementation.

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 Effectiveness in Fostering an Innovative Ecosystem

% of banking executives that have deployed initiatives (par- % of banking executives that have deployed initiatives (limited /
tially or completely) that are delivering as per expectations partial / significant) that are not delivering as per expectations

Lending 42.70% 57.20%

Payments 45.90% 54.10%

Accounts and deposits 49.20% 50.80%

Cards 39.80% 60.20%

Wealth management 29.80% 70.30%

Non-traditional products 26.40% 73.50%

Overall 47.00% 52.90%

Indicates top 3 areas where banking executives have deployed initiatives Indicates top 3 areas where banking executives have deployed initiatives
(partially or completely) that are delivering as per expectations (partially or completely) that are delivering as per expectations

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 Evolving Roles Within the Ecosystem
As the financial ecosystem evolves, banks must innovate to assume new roles such as:

Aggregator: Integrator: Infrastructure Provider:

Bringing together a variety Seamlessly connecting Offering the backbone

of financial services under different financial and non- for other financial
one platform. financial services. services to operate.

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 Innovation Case Examples

■ Aggregator: Aggregate consumer ■ Integrator: Integrate across a diverse range ■ Infrastructure: Provide critical infrastructure
demand, attention, and data at scale of production partners (providing supply) and and standards to enable, coordinate, and
to take on dominant positions in the distribution partners (serving demand) to organize a organize production
consumption ecosystem fragmented ecosystem
◊ Indian Banks’ Digital Infrastructure
◊ Bank Bazaar: India’s finance ◊ Solaris Bank monetizes access to its APIs. By Company (IBDIC) owned by a consortium
marketplace BankBazaar offers aggregating APIs from mutiple sources and of Indian banks, is using blockchain to
customized quotes for loans and providing one-stop access across different APIs, automate trade finance processes across
credit cards. More than 50 of India’s Solaris Bank monetises API access. Using APIs, different banks. The utility is poised to
leading financial and insurance partners embed Solaris Bank’s modular banking reduce cycle time, operational costs and
firms participate on the BankBazaar services (integrated across third parties) directly trade frauds, while also helping to grow
platform into their products and services. the market. For instance, the previous 9
to 10 day for a letter-of-credit (LC) cycle
◊ Beyond banking: DBS Car ◊ Identifying a need to empower all credit partners
has been cut to 2 to 3 days
Marketplace, Standard Bank Retail that do not have the financial reach to integrate
Media Network connects advertisers with BPI’s APIs and develop their own frontend,
to digital customers BPI introduces a credit intermediation platform
for partners to seamlessly manage clients,
monitor loans, and stay updated with bank offers

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 “There is no single commercial bank in the Philippines now that doesn’t have alliances or partnerships
with any fintech player. It’s not about having to consider FinTech players in the industry as your
competitors. It’s about collaboration and cooperation, embedding our digital financial products into
the mobile apps of other integrators in the industry to bring value to both.”

Lito Villanueva, Executive Vice President, Chief Innovation & Inclusion Officer, RCBC

“WingBank Cambodia, in particular, is embracing fintech solutions to drive financial inclusion and
economic growth. This includes the adoption of mobile wallet and payment providers, which have
been at the forefront of the fintech industry in Cambodia. By adopting these measures, Cambodian
banks are not only enhancing the customer experience but also ensuring that they remain
competitive in an increasingly digital world.”

Han Peng Kwang, Former Chief Executive Officer, Wing Bank, Cambodia

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 “One way of advancing the digital engagement experience is through
partnerships and connections to create a frictionless experience. Open
innovation enables ideas from outside the company to accelerate initiatives
and create new offerings. Bradesco, for example, has an innovation ecosystem
that includes a space with startups, corporates and other partners to facilitate
new business.”

Renata Talarico Petrovic, Head of Innovation, Bradesco

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 Conclusion

In conclusion, overcoming the challenges of digital transformation and

driving innovation in banking requires a comprehensive approach across
business models, organizational capabilities, and value creation. Through
survey analysis, real-world learnings of practitioners, and case studies,
this report aims to share industry’s progress across these dimensions. By
addressing these imperatives holistically, banks can not only keep pace
with the evolving banking ecosystem but also establish themselves as
leaders in the banking landscape of 2030, prepared to meet the dynamic
needs of their customers.

We hope you found the survey insights and learnings from practitioners
in this report to be a valuable benchmark for assessing the industry’s
and your bank’s progress across these dimensions. Additionally, the
case studies provide inspiration on what progressive banks are doing
to innovate and succeed, serving as a guide for reviewing your bank’s
individual progress in this transformative journey.

111 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.
 We’re grateful to the following contributors for generously sharing their insights, and perspectives,
which greatly enriched this research

Boe Hartman Han Peng Kwang Harris Mygdalis

Co-Founder and CTO, Nomi Health, Former Chief Executive Officer, Chief Digital Officer, Eurobank,
Ex-Goldman Sachs, United States Wing Bank, Cambodia Greece
of America

Imtiaz Adam Khomotso Molabe Lito Villanueva

Founder at Deep Learn Strategies, Group CIO, Standard Bank, Executive Vice President, Chief
United Kingdom South Africa Innovation & Inclusion Officer,
RCBC, Philippines

Majid Muhammad Marina Shehfe Renata Talarico Petrovic

Chief Information Officer, Resimac, Retail Transformation Officer, Head of Innovation, Bradesco,
Australia BNP Paribas Brazil

Tony Moroney
Co-Founder at The Digital
Transformation Lab, United Kingdom

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 Survey Demographics

Regional Distribution
Regional Distribution

22.50%

39.40% 130+
Global Banking
executives
19.10%
contributed to
19%
this research
Americas Europe Middle East & Africa APAC

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 About Infosys Finacle

Finacle is an industry leader in digital banking solutions. We are a unit of EdgeVerve

Systems, a product subsidiary of Infosys. We partner with emerging and established
financial institutions to help inspire better banking.

Our cloud-native solution suite and SaaS services help banks engage, innovate, operate,
and transform better to scale digital transformation with confidence. Finacle solutions
address the core banking, lending, digital engagement, payments, cash management,
wealth management, treasury, analytics, AI, and blockchain requirements of financial
institutions. Banks in over 100 countries rely on Finacle to help more than a billion
people save, pay, borrow, and invest better.

Learn more at: www.finacle.com

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 About Qorus

A global non-profit organization established in 1971 by banks and insurance companies,

Qorus (formerly known as Efma) helps its members to reinvent themselves to thrive
— to go further, be faster and work together. Our global ecosystem brings valuable
insights, inspiring events, rich data, and active global communities all in one place.

With over 50 years of experience, Qorus provides a neutral space for best-practice
sharing and collaboration, while offering diverse knowledge and a global reach — to
more than 1,200 financial groups in 120+ countries. Head-quartered in Paris, Qorus
serves financial institutions on all continents, with offices in Andorra, Bangkok,
Bratislava, Brussels, Dubai, Istanbul, Kuala Lumpur, London, Milan, Seoul, and Tokyo.

Learn more at www.qorusglobal.com

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 About Jim Marous

Named as one of the most influential people in banking and a ‘Top 5 Fintech Influencer to
Follow’, Jim Marous is an internationally recognized financial industry strategist, co-publisher of
The Financial Brand and owner and publisher of the Digital Banking Report. As a sought-after
keynote speaker, author and recognized authority on disruption in the financial services industry,
Jim has spoken to audiences worldwide. He has been featured by CNBC, CNN, Cheddar, the
Wall Street Journal, the New York Times, the Financial Times, the Economist and the American
Banking executives. Through his podcast, Banking Transformed, Marous provides listeners with
an opportunity to hear about the organizational impact of digital transformation. With new
shows each Tuesday, Jim interviews his guests with the objective of digging deeper into the
opportunities and challenges facing banking and other industries. You can download Banking
Transformed on The Financial Brand podcast page or on your favorite podcast platform.

You can also follow Jim Marous on Twitter and LinkedIn or visit his professional website.

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117 | © 2024 Qorus and EdgeVerve Systems Limited. All rights reserved.
 For more information, please contact

Qorus: [email protected]

Infosys Finacle: [email protected]

Digital Banking Report:

[email protected]

....................................................................................................................................... .................................................................................................................................................................................................................................................................................................................................................................................................................................................................

For more information, contact [email protected] www. finacle.com

....................................................................................................................................... .................................................................................................................................................................................................................................................................................................................................................................................................................................................................

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