2016 Banking Trends

2016
Staying top of mind during the age of analytics

What we’ll cover today:
1. The state of the industry
Mobile, branches, millennials
2. Insights from thought leaders
Credit cards, big data, blockchain
3. Core banking topics
Payments, lending, investments

Let’s look at the state of the industry
Banking is at an inflection point.
The future holds big wins or
rapid failure depending on the
choices financial institutions
make today.

Silicon Valley is coming. There are hundreds of
startups with a lot of brains and money working on
various alternatives to traditional banking.
- Jamie Dimon, CEO of Chase

Fintech is
chomping
at the
fringes.

Investment
in fintech
has
ballooned…

…as the
financial
industry
consolidates.

The rise of passive investing threatens
investment bank revenue.

Big changes are
still to come…

Up to half of the world's banks will disappear
through the cracks opened up by digital disruption
of the industry.
- Francisco González, Chairman and CEO of BBVA

Technology is changing how companies are
organized and run across all industries, and ours is
no different.
- Brian Moynihan, CEO of Bank of America

We could go the way that file transfer technology
changed music, allowing new businesses like
iTunes to emerge.
- Michael Harte, Chief Operations and
Technology Officer at Barclays

“Who saw Uber coming on so quickly? ... It’s a safe bet that the
thousands of cab drivers in big cities didn’t have an inkling of
how fast Uber would disrupt their traditional business.”
- KPMG

You probably never thought of Uber as an acquirer
of small business bank accounts, but if you’re an
Uber driver and Uber can give you a debit card that
enables you to get paid — then why would you go to
a bank branch to open an account instead?
- Brett King, author of Breaking Banks

Consumers seek easy solutions.

Mortgages at
a Click of a
Button
Quicken Loans Super Bowl
ad for mortgages at a click
of a button

Financial institutions
are changing their
game plan…

They know they need to focus on profit

They’re investing less in branches…

…and more in digital.
$131 billion: Total IT
budgets in the retail
banking industry in
2015 — a 4.3%
increase over 2014.
– Ovum Research

Technology investment skyrocketed
from fourth priority in 2014 to first
priority in 2015.
- Temenos

Branches continue to be a burden

Users want a
better digital
experience

38% of consumers have
reduced how often they bank
somewhere because of a
poor digital experience.
MX Consumer Survey

Consumers
are getting
increasingly
picky

1. Monitor all accounts in one place
2. Anywhere, anytime
3. Move money when and how they want it
4. Security
5. Make it easy, make it work
6. Being able to view and do (action it)
What consumers crave from digital
- Javelin Strategy & Research

71% of consumers believe
their relationship with their
bank is only transactional.
The focus should be on advocacy
- Accenture

It’s clear that the best path forward is advocacy—
adding real value that enriches lives and
overshadows any rival experience
that competitors provide.
- Javelin Research

What to look for
in 2016
1. Fintech + FI partnerships

We have a whole team of people helping fintech
companies be successful, and we think that’s a big
area for growth for us for the coming years.
- Gary Becker, CEO Silicon Valley Bank

Throughout 2016 you will hear about banks creating
accelerator startup funds, co-investing with young,
ambitious entrepreneurs.
- David Horton, Head of Innovation at Synechron

“2016 will see more banks partnering with startups in
a quest to get to market faster than their legacy
systems currently allow.”
– Louise Long, Head of Human-Centered Design at Nab Labs

What to look for
in 2016
2. Blockchain

The biggest idea in banking right now is
blockchain technology.
- Brad Leimer, Head of Innovation for
Santander Bank

Suits are replacing hoodies and ripped jeans at
blockchain conferences.
- Mark Buitenhek, Head of Transaction
Services at Dutch bank ING

You should be taking this technology as seriously
as you should have been taking the development of
the Internet in the early 1990s.
- Blythe Masters, CEO of Digital Asset Holdings

What to look for
in 2016
3. The Age of Analytics

We believe we are entering
the 5th era of banking
The Baronial Age
The Diplomatic Age
The Casino Age
The Digital Age
The Analytics Age

Netflix, like Amazon, is a flywheel that keeps
spinning faster: As it gets more subscribers, it gets
more data and more money to fund more content,
which in turn helps it bring in more customers, and
on and on, ever faster.
Big data is the future. Will banks crack the code?
- Farhad Manjoo, NYT Columnist

2016 will be the year when data and analytics finally
get a decent, well designed front-end.
- David Horton, Head of Innovation at Synechron

“Contextual data analytics will introduce more
intelligence into each customer contact, laying the
groundwork for augmented intelligence towards the
end of the decade.”
- Chris Skinner, author of Digital Bank

“Remember when the question was: “Where do you bank?’’
Not any longer. Now, it’s more likely: “How do you bank?’’
- KPMG

2016 Banking Trends

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