Mobile is quickly becoming the largest banking channel by number of transactions for retail banking, according to a 2016 whitepaper, “Technology Mega Trends in Retail Banking”, prepared by Temenos, a global software provider of core banking systems.
The study shows that in addition to mobile, there are four other mega trends in retail banking – cloud, big data, social media and blockchain.
Cloud services are becoming a bigger focus for regulators and policy-makers in Europe, who are less concerned about security and data privacy. Temenos predicts that by 2020 all new core banking initiatives will be on the cloud.
The investments in big data are also increasing and it is expected that the global IT spend in the financial services industry will rise by 50% by 2019. The value of big data to the retail banking industry is estimated to be more than £6 billion over the next five years.
Social media is also becoming a more and more important channel for banks, as it provides them with contextual awareness of their customers’ preferences and feedback on their products and services. The use of social media grows by 10% each year.
The final trend discussed is blockchain, which is expected to impact payment processing by reducing the need for intermediaries and forcing banks to re-examine their role in the payments eco-system. By enabling banks to use mutually shared infrastructure, some industry experts predict that blockchain could reduce banks’ infrastructure costs by $15-20 billion a year by 2026.
The full whitepaper is available here.