How Many People Globally Work In Financial Services

Global banking industry outlook

August twenty, 2021

RESEARCH REPORT

In cursory

In brief

Afterwards a decade of disruption, a digital end game is emerging in banking. Winners and losers will come from both traditional and challenger sectors.
Turn a profit pinch, the increased price of risk, and accelerating digital transformation are all leveling the playing field for banks.
Another super-cycle is gaining momentum: Share and acquirement are leaking out of banking into other industries, especially bigtech.
This is driven by 'ambient cyberbanking,' where cyberbanking services disappear into the groundwork of our digital lives and industry barriers blur.

Since 2011, disruption has been the name of the game in banking, thanks largely to the rise of the broader digital economic system. On Accenture's Disruptability Index, which quantifies disruption across industries on a scale of 0 to 1, banking moved from 0.43 in 2011 to 0.52 in 2019 in terms of current disruption—elevating it from the index'due south Vulnerable category and into Volatile. In 2020, Accenture Research estimated that 20% of all players in the cyberbanking and payments sectors were less than 15 years old.

The drivers of these changes—ascent consumer expectations, nimble new manufacture players, powerful emerging technologies and shifting regulations—put immense pressure on incumbent banks to bring meaningful innovation to their established businesses.

And that was before the pandemic. COVID-nineteen supercharged the digital cyberbanking trend. Banks saw in-person traffic in branches plummet, along with the use of greenbacks.

But the pandemic also had a less anticipated impact: leveling the playing field. This is credible in three key areas.

Iii competitive keystones

COVID has weighed on the lesser line of many banks. Leading institutions saw double-digit net income declines in 2020—reordering banks' priorities.

The pandemic created a credit crisis, substantially increasing the toll of risk for banks.

The pandemic was a shot of adrenaline for digital change. Many banks reached milestones in months that they had plotted on multi-twelvemonth journeys.

The new globe of 'ambient cyberbanking'

While the digital end game emerges, another super-bike that demands attention is gaining momentum. Market share and revenue are leaking out of the banking sector and into other industries, especially bigtech. Firms like Google, Apple, Amazon, Tencent and Rakuten are increasingly incorporating financial services products into their offerings.

These new offerings, like Google Plex accounts in the United states of america and Alibaba offering product insurance to United states and EU clients, present a pick for incumbent banks: They need to either embrace the modify and partner aggressively, or notice means to increase the salience of their offerings to remain competitive.

4 imperatives for success

The outlook is potent for banks that address these iv imperatives, which are based on decades of our work with many of the most successful banks in the world.

Sympathize the unique dynamics of every market

To concenter investors, banks need to understand what makes their markets distinct and focus on the specific capabilities that will assistance them thrive.

Reshape your business models

Forward-thinking banks volition explore the art of the possible and transcend incremental improvements to their digital capabilities. Read more than.

Set a strategy to reap the digital premium

Recent research shows that combining great applied science with a stiff purpose really differentiates superior performers.

Prioritize tech enablement

Competing on tech architecture will be fundamental for generating value, every bit at that place is a strong correlation betwixt tech adoption and revenue growth.

Challenge everything

The future of banking is much less predictable than it was when the disruption kicked off a decade ago.

Success in this mural demands a sharper focus on how each banking concern intends to win—along with the agility and power to double downward on what works and carelessness what does not.

Banks that fail to change will struggle in this new battleground and the gap between winners and losers volition become even wider.

It's time to challenge everything—products, processes and philosophies—to go future-ready.

For more details on preparing for the digital end game in banking, read our full report.

Frequently asked questions

Is cyberbanking a stable or a disrupted industry?

Accenture measures disruption beyond ii dimensions: current disruption and susceptibility to future disruption. Our Disruptability Index analysis rated banking as being just to a higher place average (0.52 on a scale of 0 – 1) in terms of electric current disruption, although this is rising – it was 0.43 in 2011. It'south no surprise, then, that it's expected to suffer more disruption in the years ahead. In fact, at nearly 0.67, it is second only to insurance out of the 18 industries analyzed.

What impact are digital challenger banks having?

Prior to COVID-19, the digital challenger banks were making significant advances in a number of important markets. Notwithstanding, rapid gains in client numbers couldn't hide the fact that nigh of these customers had a primary account with a traditional bank where they received their salary and kept about of their money. The gradual increase in trust in challenger banks was abruptly halted by the pandemic, which caused customers to retreat to the perceived safety of the more than familiar brands. At the same time, traditional banks were forced to digitize chop-chop, narrowing the gap between the service levels of the innovative newcomers and their more than conservative rivals. The net issue is that established banks are better equipped than ever to counter the threat of the digital offset-ups.

The appearance of ambient banking is a watershed moment for the banking manufacture. Information technology describes the incorporation of financial services into the offerings of companies that are non, primarily, financial services providers. Until at present, a customer who bought a car might have obtained a loan from a bank in a transaction that was linked to only distinct from the purchase of the car. With ambient banking, the fiscal aspects are a seamless, frictionless part of the main transaction and the bank is usually invisible to the customer. The significance is that by conceding buying of the client relationship, banks too allow revenue and market place share to shift out of the banking industry to large, strongly branded players – most of them bigtech platforms – in a diversity of other industries.

What function will AI play in the future of cyberbanking?

AI is already widely used and new applications are continually being tested. In many banks information technology serves mainly to salvage workers of authoritative tasks, improving both the accuracy and efficiency of routine processes and allowing the workers to spend more than fourth dimension on tasks that are complicated and require judgment and imagination. Increasingly, however, AI is being used also to improve the customer experience. By analyzing vast stores of data and converting insights into relevant actions, it enables banks to engage with, advise, assist and sell to customers in a much more personalized way. At a fourth dimension when COVID-19 is isolating customers from their banks, AI is helping to bring them closer by facilitating more than empathetic and meaningful engagements.

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