Banking Industry 2020

GLOBAL
TRENDS IN
THE BANKING
INDUSTRY
2020
2 | Global Trends in the Banking Industry 2020 External Document © 2020 Infosys Limited
Contents
Foreword 4
Customer experience to drive revenue 5

Trend 1: Omnichannel strategy for a 360-degree customer view 5
Trend 2: Wow the customer with digital onboarding 7
Trend 3: Open banking for a banks’ all-encompassing persona 8
Focus on technology innovation 10

Trend 4: AI-driven decision making 10
Trend 5: Innovation through fintech collaboration 12
Improve cost effectiveness 14

Trend 6: Drive operational efficiencies through digitization 14
Trend 7: Manage compliance costs in an increasing regulatory environment 16
Trend 8: Cloud for infrastructure resiliency and efficiency 17
References 19
Infosys contributors 20
External Document © 2020 Infosys Limited Global Trends in the Banking Industry 2020 | 3
Rajneesh Malviya Ashok Hegde Mandar Joshi
Senior Vice President, Vice President, Head, Banking,
Financial Services, Infosys Financial Services, Infosys Financial Services, Infosys
Foreword
and middle-office cost structures. a strong base consisting of
And, technology adoption will data, processes and customer
be the norm this year to build experience. Digitization and
The banking industry is on the resiliency in these adverse market advanced technologies such as
cusp of adopting digitization and conditions. AI, ML, cloud and blockchain will
new-age technologies. This year come to the forefront.
Digitization of customer
(2020), digital technologies onboarding and real-time COVID-19 has placed banks
such as artificial intelligence regulatory checks will gain under extreme stress as
and machine learning have prominence as customers prefer revenue sources plummet and
enthusiastically been adopted social distancing due to the credit risks rise exponentially.
by the industry to address the pandemic. Unprecedented economic
challenges brought about by disruption, a competitive market,
COVID-19. The pandemic has Fintechs have become an integral
rising customer expectations
forced banks to transform their part of the banking industry.
and external forces have driven
decision-making processes and Incumbent banks have increased
the banking industry to explore
focus aggressively on costs. their collaboration with fintechs to
new business models centered
speed up innovation and shorten
Customer experience remains around digital solutions and the
“time to market.” Many large
the primary focus for banks that cloud. New business models and
banks have acquired fintechs that
are looking for ways to improve service offerings will be created
dovetail into their digital strategy.
it either with their applications that embrace the power of
The banking industry is moving
or simplifying customer journeys open banking. Legacy platform
toward a more collaborative
and introducing omnichannel transformation, adoption of
and open environment while
experiences. Banks will target technology, collaboration with
focusing on data protection and
digitization in almost all possible fintechs and operational resiliency
minimizing systemic risks — a
areas. However, COVID-19 will together will play a major role
tough balancing act that is no
force banks to focus on end- in 2020 for banks to first survive
simple feat to achieve.
to-end digitization that enable and then thrive. Even though the
businesses to function, while Formulation of universal business environment is tough,
“wow” factors such as dashboards standards such as API will banks are taking appropriate
take a back seat. harmonize disparate systems steps to safeguard the interests
that bring in interoperability of of employees, shareholders and
Banks will increasingly rely on systems for commercial use. society at large.
data to define customer journeys
and drive decisions. Banks will In summary, banks will take
also look to transform their back- aggressive steps toward building
CUSTOMER EXPERIENCE TO
DRIVE REVENUE
Best-in-class customer service and frictionless experiences continue to be pivotal in banking, and underlies many
of the trends this year. COVID-19 has exacerbated the need for digital solutions, video-based interactions and
omnichannel experiences. These are necessary for banks to provide uninterrupted services, safely to customers
and allow business to continue as usual. Open banking allows banks to use customer data to create personalized
products and services for customers. Yet, moving away from legacy technology to adopt open-banking systems
remains a demanding task.
Trend 1: Omnichannel strategy for a 360-degree customer view

Customers across industries easily to another channel to be and synchronized orchestration
want seamless experiences. picked up later to complete the of all customer interactions across
The banking industry is no same journey. This means banks multiple touch points must be
exception. With globalization have to work on synchronizing device agnostic as well. Digital
and changing customer needs, processes behind the scenes — platforms bring in omnichannel
customers want embedded digital the customer and staff journeys interactions and significant cost
channels in their busy lifestyles. must be coordinated to make savings. This can be achieved by
Making customer experiences them “omnichannel compatible.” integrating channels, products,
seamless would mean making the Customers should be able to processes, peripheral applications,
corresponding customer journeys choose products or services from and underlying data and
simpler, smoother and sustained. the location and channel of their infrastructures, while decreasing
This further implies that banks choice with convenience and still the dependence on the core
must achieve the highest levels of have a consistent experience. They banking systems. These platforms
multichannel delivery outcomes should be allowed to choose the allow banks to deliver seamless
and become truly omnichannel. most efficient and comfortable end-to-end digital banking
way for them to interact and still experiences and are scalable
Customers should not experience
change their minds mid-way. and enable banks to capture a
gaps as they move across
360-degree view of customer
channels. A customer should Digital platforms help provide a
behavior across multiple channels.
be able to start a journey in 360-degree view of customers and
one channel, pause on it, move their interactions. The centralized
Figure 1. Digital banking platform — a 360-degree view of customers and interactions
Anywhere Any channel Any content
Mobile, office, home, Smart phone, tablet, Video, voice, web,

inter-company laptop, thin client social, chatbot
CLOUD/ON-PREMISES
Source: Infosys
As a next step, banks need to accessible and proactive services channels and enabled for multiple
think first about all the possible to its customers in managing devices, through a digital banking
interactions the customer finances. platform. Banks must enable
might want to have before mass personalization. This will
Although branch numbers are
thinking about the channels, help them connect to customers,
shrinking globally, they will not
processes, devices, technology reaching out from multiple
go extinct. While the load of the
and applications. This will shift customer touch points. They
branch will be redistributed,
the bank’s focus from being must enable multiple delivery
branches will continue to be
“inward-centric” to being options across channels, but
pivotal to the omnichannel
“customer-centric.” Focusing also differentiate their services
strategy and the digital
on the customer can also help based on customer profiling
banking platform, as customers
banks identify and collaborate and customer preferences.
will use them as the last bastion
with third-party providers and Orchestration must be automated
for unresolved queries. But
fintechs in order to provide a and a routing strategy for
branches need to be designed
better customer experience. marketing or notifications must
based on their market segment
For example, Bank Millennium be defined. The lines between
and specific location. Their design
in Poland has implemented humans and machines will
needs to factor in customers’
mass personalization based on become blurred as AI gains
characteristics, behavior, and
customer behavior segmentation. prominence in decision-making
preferred products and services.
As a result, the bank was able to and personalized marketing and
sell half of its retail loans through communication.
its digital channels. Recommendation to adopt
Banks can then use data and omnichannel strategy
artificial intelligence in order to Banks need to adopt an
understand and predict customer omnichannel strategy to retain
behavior. Royal Bank of Canada their customers. They must deliver
has implemented an AI platform an interactive, personalized
that provides easier, faster, more experience through multiple
Trend 2: Wow the customer with digital onboarding
Digital customer onboarding reimagining a few critical in its digital onboarding process,
makes onboarding fast and onboarding use cases such as where customers are allowed to
seamless and is important to data origination, KYC, credit show their ID proofs through a
create a lasting experience for checks and fraud detection. webcam or smartphone camera
Gen X and millennials. Disruptions Some Asian banks, such as DBS, to complete the KYC process. In
from fintechs and the isolated UOB, Axis Bank and ICICI Bank, India, the banking regulator has
COVID-19 pandemic, have have already established efficient also issued guidelines for video-
forced banks to increase their customer onboarding processes. based KYC.
investments in digital customer Asian banks are ahead of their
Reducing the time to onboard
onboarding. Early adopters have counterparts in the U.S and
a customer is difficult and
reaped the benefits, as it ensured Europe in implementing improved
calls for a strategic change in
business continuity during and innovative onboarding.
existing processes and the way
the pandemic, while reducing
Banks should consider onboarding data and processes
operational and regulatory risks.
implementing video-based KYC are handled. Back-office and
As interest grows from banks that adheres to local regulations. middle-office activities have a
globally to reduce physical Spanish regulator SEPBLAC large role to play here.
dependency, they have started pioneered video identification
Accurately capturing customer
data and digitizing the data at its
Figure 2. Key components of digital customer onboarding origination is important to make
the process effective. Optical
character recognition (OCR) reads
customer details from customer
documents in real time, and then
Data extraction extracts the required data for
from document onboarding.
image-OCR Banks must connect with the
larger ecosystem by integrating
with open APIs. Open APIs
Digital signature Video-based KYC help seamlessly connect to
and verification third-party databases including
credit bureaus and government
databases, verify customer data
Digital customer and ensure they comply with
onboarding regulatory laws in real-time. This
real-time authentication helps
Face match, minimize the risk of frauds as any
AI-based straight biometrics and voice customer non-complaint with
through process to text AML, FATCA, OFAC and PEP rules
could pose a risk to the bank.
Real-time data Banks leverage artificial
fetch using intelligence in multiple ways
open API to enable quicker and secure
customer onboarding. AI is
used in image forensics and
performs a face match. It enables
Source: Infosys
a personalized approach in
analyzing customer data and ownership of the documents. And regulators are on-board as
ensuring all loopholes are Customer photographs are well. They have reacted positively
plugged. AI automates the captured in real-time and cross- and are approving the increased
analysis of multiple customer checked with all the photo IDs use of digitization in customer
documents for sufficiency and submitted by the customer onboarding. But banks should
accuracy to drive a binary decision using both machine- and deep- start thinking ahead too. They
for onboarding new customers. learning-based image forensics. need a plan to introduce digital
This helps reduce the time needed Global banks such as HSBC, Wells customer onboarding using
to complete the process from Fargo, WestPac, Capital One and a combination of technology
days to minutes. RBS NatWest Barclays use biometrics and facial through transformational
enabled selfie-based current- and voice analytics in digital programs by aligning with
account openings using AI. AI has customer onboarding. accelerators such as inhouse
also strengthened the verification custom built patches and fintech
of signatures by cross-checking solutions. Developing a digital
them with multiple ID proofs,
Recommendations to identity framework with an
further securing the agreement adopt digital customer identity accreditation process
creation process. onboarding built around digital customer
onboarding planning will make
Machine learning and deep Banks increasingly want to
them more competitive.
learning help verify customer address the limitations in
data across documents and the legacy onboarding processes.
Trend 3: Open banking for a banks’ all-encompassing persona

Banks were not built to be data outside their boundary — sell and upsell. This will help
open. As such, incumbent customers can use more than retain customers. Banks offering
and legacy platforms are an one bank for their savings and bancassurance seamlessly are
obstacle to today’s frictionless investments. To also succeed as relevant examples. These products
digital customer experiences. a banking aggregator, they must are not on a bank’s balance sheet;
But digitization represents a collaborate with competitors. hence they don’t need capital to
significant opportunity to build For example, BBVA’s aggregation earn this fee-based income.
new models and open streams integrates data of all its customer’s
Another model is the platform
of revenue growth. So banks accounts and cards that they have
provider role, which allows banks
are embracing open systems to with BBVA and other banks into a
to share and distribute their
provide options to their customers single application.
data, enabling easy integration.
– while regulators are also
In this open distributor model, This is done by opening the
modernizing their approach. But
Banks can continue to focus on infrastructure and APIs to those
doing the regulatory mandated
their core services and most who are willing to innovate and
bare minimum is a dangerous
profitable service lines while collaborate. Banks can monetize
recipe to lose out to competition
not depriving their customers of their data by selling to the
from peers, fintechs and GAFA.
wider offerings. Banks can also ecosystem players. Allowing
Open-banking adoption can help earn commissions from reselling players to roll out products faster,
banks monetize data, develop third-party products and services. helps banks move from a product-
and cross-sell offerings and With the combination of massive focused strategy to a consumer-
gain market share. The biggest customer data and open banking, centric one. Clear Bank in the
disadvantage that banks currently banks can bundle products and UK works on a “bank for banks”
have in providing a seamless services. They can then create concept. It does not provide any
customer experience is that they targeted, customer-oriented services to its customers but
do not have a full view of a client’s personalized solutions to cross- enables financial institutions
to offer solutions and services experience to their customers. to lay out a timeline and an
and at the same time provides Banks can help their customers approach regarding how the bank
secure access to core banking by building the needed products will transition into the identified
payment schemes. and services accessible at one open-banking model. Banks need
place conveniently. A bank to have a unified enterprise data
The data service provider role primarily dealing with core strategy. It is imperative to have a
allows banks to monetize services can offer credit cards and collaborative mindset and should
transactions by exchanging wealth management products not look at open banking or API
information in a secure manner through applications, offered by as just another technology play.
through APIs. Examples include a third parties. They can use their Choosing a model or combination
credit check to be performed for infrastructure to integrate with of models that suits a bank and
onboarding or AML checks done third-party product offerings. its strategy is key. Making this
during onboarding. When data is decision at the earliest possible
shared with external parties, there opportunity would help a bank
is a risk of losing the customer Recommendations to not lose further ground to early
relationship. But banks will be adopt open-banking adopters. This will become
able to bring the best of the end- vital as consumer expectations
Banks need a lean team that
to-end solutions through such keep growing.
will identify and then analyze
partnerships.
all the pros and cons as well as
An aggregator model helps banks challenges and risks, all while
build on customer centricity, considering the growth strategy
providing value and a “frictionless” for the bank. The team will need
FOCUS ON TECHNOLOGY
INNOVATION
Innovation has always been difficult for banks. That’s because of their inherent nature to be risk-averse. Their
new-found rivals on the other hand, are bold. These digital natives have a consumer-centric approach that helps
foster innovation, test quickly, fail fast and change with agility. The key to their success is their ability to rapidly
develop new features in line with customer feedback. And banks need to bank on these features to decide on
buy versus build decision.
At the boundaries of this new wave of innovation is artificial intelligence. New AI models can be trained to make
real-time decisions supported by strong and broad data inputs. Yet, while many data-driven decisions can be
made by AI, a human-touch is still recommended in the form of risk and compliance teams to oversee regulatory
requirements.
Trend 4: AI-driven decision making

Banks across the globe have its jurisdiction toward next- APIfication. AI models rely on
been grappling with automating generation banking through data to make real-time decisions.
their business processes. automated AI-driven systems. Hence, it is important for banks
Regulators have accepted the Embracing AI in decision-making to connect with external parties
use of technology and favor the will result in significant time using APIs.
adoption of advanced technology savings as decisions will be made
such as AI, in areas which are in real time, especially on retail
human intelligence dependent. loans, auto financing and credit
Recommendations to
For example, the Hong Kong cards — areas where the volume revamp internally
Monetary Authority has included of transactions is distinctly high. Banks with a significant portfolio
revolutionary guidelines for in retail and MSME lending
AI, automation and analytics The base of AI-driven decision- need to prioritize AI-based
that will drive the banks under making is digitization and automated decision-making,
as this will bring speed and bureaus and government as well. Often, the decision flow
efficiency to the operation cycle agencies to get sufficient quality falls into “exception” due to a data
and elevate overall performance data in real time to enable discrepancy or data insufficiency.
and capabilities. decision-making. An automated data management
and data repair process can
AI models need to be built Paper-based processes must enhance decision-making speed
in conjunction with the risk be digitized and automated. and efficiency.
appetite of a bank. Complex This requires automating
models, such as a decision tree and streamlining processes. Consumer banking divisions were
or random forest, are often used Implementing accelerators such early adopters of digitization
in automated decision-making. as RPA, digital signatures and due to inherent large volumes
Banks need to ensure that their analytics will help. of data. However, of late, banks
decision model encompasses have started leveraging AI-
AI can also help banks with their driven decision-making in the
internal and external data.
risk and portfolio management. commercial banking portfolio
Decision models should allow
As banks move toward digitization as well. RBS and NatWest have
proper weightage based on a
and automated decision-making, automated the decision-making
bank’s exposure toward a specific
it’s important to ascertain the process for high-value loans for
product.
thresholds for risk tolerance and their commercial and real estate
API enablement is key for a the maximum risk appetite a bank portfolios. Another example
successful decision model. Banks would like to take. includes HSBC deploying an
would need to start connecting automated AML and sanction
Banks can manage exception-
external APIs or open APIs from screening decision-making system
handling through automation
third-party agencies, credit for its global trade business.
Figure 3. Key components of AI-driven decision making Recommendation to adopt

AI-driven decision-making
Banks need to make informed
decisions and evaluate all risk
Risk and portfolio exposures. Automated AI-driven
management scoring and decision-making
can enhance speed, but further
thought is needed in model
building and making the model
robust to identify hidden patterns.
API enablement Straight through But compliance and risk teams
and integration process must centrally control this,
AI-DRIVEN ensuring an independent process
DECISION review in order to meet all the
MAKING necessary regulatory compliance
requirements. A focus on credit
strategy optimization will also
help encompass the risk strategy.
Automated
AI-based
exception
decision engine
handling
Source: Infosys
Trend 5: Innovation through fintech collaboration
Historically, banks had no budget Figure 4. Fintech ecosystem
or interest to adopt technology
and innovation, and were focused
on ”run the bank” activities and
meeting mandatory regulatory
changes. But delighting customers Government
is now a priority. In part this also agencies
exemplifies the emergence of
GAFA (Google, Apple, Facebook,
Amazon) as a real threat to the Financial Regulators
banking industry. institutions
The business environment today
poses competition from many
neo-banks and digital-only banks. FINTECHS
Disruptions such as COVID-19 are
also forcing banks to collaborate
and fast-forward innovation. Third-party
Collaboration would help banks Entrepreneurs
agencies
advance technologically and
boost growth. Fintechs deal with
innovative technologies that Developer
can help in areas such as digital community
lending, analytics, default and
credit risk, and better customer
insight to determine the
development of future banking Source: Infosys
products. Their technology stacks
are built on the efficient use of
data science, AI, ML, blockchain So, what should banks do? Scotland has bought a 25%
stake in UK-based fintech Loot,
and cloud. Many factors today are driving which offers current account and
Fintechs have built a well- banks to rethink and partner prepaid card solutions. RBS has
connected growing ecosystem with potential fintechs in their also collaborated with FreeAgent,
with regulators, third-party area of business. Millennial a fintech that offers financial
agencies, developer communities customers demand seamless and accounting cloud-based solutions.
and entrepreneurs. While real-time experiences. But banks HSBC has joined forces with
research and innovation is need to shift quickly from their Australian fintech Identitii to help
funded by entrepreneurs conventional mode of innovation streamline client experiences and
and venture capitalists, it is to a partnership-based innovation. automate accounts receivable.
important to get support from Collaboration with fintechs will HSBC has also collaborated
the regulators and government speed up bank’s execution in with Bud to access the startup’s
bodies, because of their market digital transformation and meet open banking aggregation.
expertise and involvement in customer expectations. Barclays Bank has partnered with
infrastructure setup. Large banks have already acquired fintech Bink in introducing an
a large stake in fintech companies. efficient loyalty program for its
For example, Royal Bank of cardholders.
Recommendation for onboard needs to follow a careful becomes difficult to establish the
selection and strategic alignment right connection.
banks to build a fintech process. Banks often look for
GAFA have already stepped into
ecosystem fintechs with proven solutions
the payments and banking sector.
and products. In some cases, a
Banks need to evaluate “build Therefore, partnerships with
geography-specific solution or
vs. buy” at every stage of their fintechs specializing in a niche
option is preferred, especially
technology investment in any technology and innovation are
in cases involving the need
initiative. Fintechs can augment crucial for banks to keep pace
for compliance or regulatory
banks’ existing offerings, add to in this dynamic world. Banks
solutions. A mutual trust needs to
customer delight and quickly need to be more open-minded
be built in order to drive the same
improve their net promoter and tolerant about accepting
objective of making customers’
score in a shorter time to market. innovation in order to fuel their
lives easier and boost customer
Building a customer base for a business growth.
experience. These measures
bank is no small feat; therefore
should be well balanced between
banks must carefully determine
the qualitative and quantitative
the right-fit fintechs. Fintechs do
credibility of a fintech.
not necessarily have in-depth
understanding of a bank’s overall Often large banks have multiple
objective and business model. lines of business and each
Hence, bringing the right fintech operates in silos. For fintechs, it
IMPROVE
COST EFFECTIVENESS
The economic impact of COVID-19 has been devastating. Banks are looking for ways to optimize costs and
improve efficiency, while the regulatory environment turns harsher. Banks are turning to digitization through
cloud and a host of other technologies to help save time, effort and costs
Trend 6: Drive operational efficiencies through digitization

The pandemic has impacted the for banks to automate manual ignored by management largely
economy and banking revenue approaches and make their because its ROI in the short term
has taken an unexpected hit. processes efficient. This will help cannot be justified. But times have
Banks have no option but to reduce risk and enhance growth. changed. Banks are ready to invest
look at factors that can push the Each technology can make a and leverage the technology
revenue lever as high as possible. difference, and an amalgamation re-engineered process. Charles
A flexible and agile technology of technologies can result in a Schwab and JPMorgan Chase are
framework can help banks dramatic change. some prominent banks that have
enhance operational efficiency transformed their back-office
The back office has now become
and fight against volatility or using automation.
the center of innovation. For ages,
business stress. To achieve this, a
banks have been ignoring the OCR is being used to improve
strategy for process optimization,
need to modernize the manual back-office operational efficiency.
digitization and automation must
back-office. Some banks are The technology helps with
be formulated.
maintaining multiple back-office document verification, extracting
Technologies such as RPA, OCR legacy systems, which operate data from documents, billing,
and blockchain are some drivers in silos. The back office has been customer onboarding, data
origination and digital signature banks realize the benefits of RPA. Standard Bank leveraged
verification. OCR enables 24x7 HSBC and OCBC Bank apply RPA to Workfusion’s AI-fueled RPA
digital service that is fueled by handle operations of compliance automation solution to reduce
automated document scans checks such as document customers’ onboarding time to
and uploads. verification in the KYC process. just a few minutes.
Blockchain has enhanced visibility, Unleashing the potential of RPA
increased efficiency and reduced is possible through integration Recommendation to
operational costs. Blockchain with AI to create what is called enhance operational
has allowed the creation of intelligent RPA. Banks have
solutions for some of the already realized the need for
efficiency
challenging business functions RPA and are proactively taking Increased adoption of
such as collateral management, ownership of the transformation technology including RPA,
document management, cross- of operations through RPA-driven blockchain, OCR can help banks
border payments, trade contract processes. Automation Anywhere, enhance operational efficiency
management among others. UiPath, Blue Prism, Workfusion, significantly. Automating manual
PegaSystem and Nice are some tasks will also safeguard a bank
RPA helps banks operate
of the prominent names in the against any pandemic-led
efficiently and make the best
RPA market. IBM’s Watson is lockdown. Banks should also
use of their resources. However,
supporting thousands of Crédit look for innovative solutions or
early adopters dived into the
Mutuel’s customers daily as a offerings from fintechs, to gain
technology without a strategic
virtual assistant in responding a competitive edge. A best-fit
approach. Having one will help
to inquiries related to products. product can be selected after
reviewing the processes that
Figure 5. Impact of technology drivers and operational need to be automated. In the
efficiency future, a bank’s success will
depend on how it can leverage
the RPA-AI solution in a holistic
manner rather than for individual
processes, and how it can build a
customer-oriented strategy.
Operational efficiency
R is
h
wt
k G ro
Technology drivers
Source: Infosys
Trend 7: Manage compliance costs in an increasing regulatory
environment
In a bid to spur economic growth, Nonfinancial risks such as Recommendation to adopt
most countries deviated from cybersecurity, business resiliency,
the global regulatory standards compliance, operational risk, compliance-as-a-service
that were set in place after the data governance and privacy model
previous crisis. This has resulted are some of the focus areas
Banks should consider
in the dilution of the regulatory of regulators. Regulations on
compliance-as-a-service model
framework, and as a result, there fintechs have come into existence,
that will reduce associated costs
are many regulations that are yet providing them the latitude to
and will help banks to speed
to be implemented. Regulations research and transform while
up with the frequent regulatory
are modified and reevaluated ensuring they play within the
tractions. Often regulatory
by regulatory agencies in order regulatory framework. The capital
specifications and standards are
to tailor them based on the requirements in CRD5 and CRR2
interpreted in different ways by
prevailing business climate and have been revised, thereby
different intermediately parties.
perceived risks that are dominant strengthening the liquidity
This has created fragmented
at the time. situations of EU banks. Meanwhile,
environment within banking
GDPR, which protected the
In the U.S., the Economic Growth, industry and will further require
personal data of EU citizens, has
Regulatory Relief and Consumer legislation to balance the arena.
been implemented by many
Protection Act ensures that Hence, banks should work closely
financial institutions in the
regulatory necessities for the with the regulators to get clarity
European Union.
major financial institutions are in and standardize the regulations
place; however, the regulations Financial institutions are globally or as per the jurisdiction.
are withheld for those companies under substantial pressure to
that fall below the legislative comply with local jurisdiction
threshold. The Volcker Rule and home country guidelines.
has been relaxed and trading Meanwhile they continue their
restrictions have been reduced compliance journey exhausting
for midsize banks while easing it the latest technologies in risk
for larger banks. This has reduced and compliance. Many banks are
banks’ compliance requirements. facing over billions of dollars of
Amendments to the CCAR and fines due to noncompliance. With
DFAST, frameworks used for huge fines and operational costs,
stress testing, have improved the banks are left with a pittance for
design structure and brought any transformation projects.
in transparency.
Trend 8: Cloud for infrastructure resiliency and efficiency
Financial institutions are facing rollout of new products and Cloud helps connect the
challenges presented by new services relevant to the market. enterprise. Changes in consumer
dimensions, including ever- behavior have led to core system
Costs can be contained, and
changing customer expectations, upgrades, automation of back-
initial capital expenditure can
emerging technologies and office-linked processes and the
be reduced. Banks can pay
new business models, and elimination of data silos. The cloud
for technology costs based
all of these agenda items see helps collect, store and analyze
on operations and can easily
regulatory compliance loom in data efficiently. It helps enterprise-
adapt to changes in priorities
the background. wide synchronization by breaking
and manage cost efficiencies
operational and data silos, such
Cloud technology helps face these through computing capacity and
as customer support, finance, risk
challenges. It changes banks’ enormous storage availability.
and regulatory compliance, across
logic and approach in finding
A distributed environment functions. This leads to integration
solutions to problems. Cloud is
can be built and an unlimited of business divisions, sharing data
comparatively less expensive,
number of micro services can and driving combined decisions to
faster and a more elastic
coexist. Banks need to be more help solve customer issues. Banks
alternative to an on-premises data
innovative in accessing the right can monetize their enterprise data
storage and compute option.
data to get actionable insights through other banks, fintechs
Financial institutions can and are looking to harness and and third-party players in the
implement new business and derive benefits from the massive expanding ecosystem.
operating models to increase data they possess. These data
Cloud encourages business
revenue generation and new sets can be tapped to strengthen
innovation. It helps create a
solutions can be efficiently built customer insights by applying
strategy for customer experience,
and scaled more quickly. This agile advanced analytics.
offers, optimizing operations and
innovation helps with a faster
talent management, by leveraging respond quicker to outages and Recommendation for
new tools such as AI, ML, NLP, IoT disruptions through data backup
and virtual reality. Google Cloud and seamless recovery. It allows to banks to adopt cloud
has signed a five-year deal with move data across data centers and Banks should look further at cloud
Lloyds Banking Group as part of regions. Security on the cloud has to increase operational efficiency,
the bank’s endeavor to spend GBP a track record of being as secure scale up and create new business
3 billion on digital transformation as an on-premises environment. models. Cloud adoption helps
projects to modernize Standard Bank SA has started a banks equip themselves with the
customer experiences. move of its on-premises ERP SAP capacity to be able to process
and SAP S/4 Hana customers to massive, fluctuating volumes
Aligning business and technology
Microsoft Azure Cloud. While of data. This opened a huge
helps units with fresh talent and
this is a joint development of the potential for agility and long-term
newer ways of working. New
tech giants, the objectives are growth in the banking industry.
technology solutions attract fresh
very clear: to reduce reliance on Banks can uncover new revenue
talent with the latest skill sets,
their data centers, and to achieve streams and mitigate risk by
such as DevOps and Agile for
simplification, acceleration addressing capacity, redundancy
financial institutions.
and innovation. and resiliency.
Cloud helps establish application
Today, cloud providers offer
infrastructure that is resilient,
generic cloud services. Goldman
secure and scalable as needed.
Sachs is considering a rollout
These characteristics are
of a vertical cloud platform
vital in dealing with business
specifically to be used by
exigencies such as the COVID-19
financial institutions.
pandemic. With cloud, bank’s
References
https://www.forbes.com/sites/alanmcintyre/2020/01/09/10-banking-trends-for-2020-stormy-weather-ahead/#3554f10a1c06
https://thefinancialbrand.com/93137/2020-retail-digital-banking-trends-priorities-experience-data-branches-payments-ai-cloud-innovation/
https://bankingblog.accenture.com/top-10-trends-banks-2020
https://www.americanbanker.com/list/the-banking-tech-trends-that-will-dominate-2020
https://www2.deloitte.com/us/en/insights/industry/financial-services/financial-services-industry-outlooks/banking-industry-outlook.html
https://www.moneythor.com/2020/01/22/top-banking-trends-2020/
Infosys contributors
Rajneesh Malviya Ashok Hegde Mandar Joshi
Senior Vice President, Financial Services Vice President, Financial Services Head, Banking, Financial Services
Each contributor mentioned below is a consultant in the banking competency area.
Abhik Kar
Venkataramana R
Alice Thankachan
Producers
Samad Masood Sharan Bathija
Infosys Knowledge Institute Infosys Knowledge Institute
London Bangalore
About Infosys Knowledge Institute
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technology trends through compelling thought leadership. Our researchers and subject matter experts provide a
fact base that aids decision making on critical business and technology issues.
To view our research, visit Infosys Knowledge Institute at infosys.com/IKI
For more information, contact askus@infosys.com
© 2020 Infosys Limited, Bengaluru, India. All Rights Reserved. Infosys believes the information in this document is accurate as of its publication date; such information is subject to change without notice. Infosys
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GLOBAL

Customer experience to drive revenue 5

Focus on technology innovation 10

Improve cost effectiveness 14

Trend 1: Omnichannel strategy for a 360-degree customer view

Anywhere Any channel Any content

Mobile, office, home, Smart phone, tablet, Video, voice, web,

Trend 3: Open banking for a banks’ all-encompassing persona

Trend 4: AI-driven decision making

Figure 3. Key components of AI-driven decision making Recommendation to adopt

Trend 6: Drive operational efficiencies through digitization

Each contributor mentioned below is a consultant in the banking competency area.

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