Intelligent ATMs are kiosks with functionalities beyond basic services; e.g., video-banking/remote teller technology, rapid dispensing capabilities, contactless, card-less withdrawal with mobile advice, interaction between ATM and online systems and ecosystems, e.g. Assuming that digital channels become the default sooner than previously expected, the role of the branch will necessarily evolve, although human-centered support will remain essential especially in transitioning to new models. SOURCE: McKinsey Panorama FinTech database, Panorama Global Banking Pools 52% of Fintech investments focus on retail banking 9% 4% 4% 18% 8% 2% 11% 12% 14% 4% 5% …% # of startups and innovations as % of database total 1 <5% 5%-7.5% 7.5%-10% >10% Banking segment’s share of total banking revenues Retail banks have been slower to embrace blockchain technology and face greater challenges in reaping its potential benefits than their more … payout from an app at ATMs etc. This creates a rare, mutually beneficial opportunity for banks to rejuvenate their trust-based relationship with society. The next normal arrives: Trends that will define 2021—and beyond, Based on the A1 scenario explained in: Sven Smit, Martin Hirt, Kevin Buehler, Susan Lund, Ezra Greenberg, and Arvind Govindarajan, “. Reinvent your business. McKinsey underscores retail banking sector's hesitation for blockchain adoption in new report Mon, 10 Jun 2019, 07:29 am UTC Consultancy firm McKinsey & Company said that retail banks are slow to adopt blockchain technology, citing regulations and conservative consumers as obstacles. One bank saw an increase of 30 percent in sales when there was an appropriate and timely (24-48 hours) human response compared to a purely digital journey. Pre-COVID-19 Finalta research indicates that 48 percent of incoming US contact center calls could be re-routed for digital resolution (e.g., transaction, balance and billing inquiries and peer-to-peer fund transfers). Juggling a shift to digital and reinforcing client relationships while making major operating model adjustments and rethinking end-to-end credit risk portfolios is no mean feat. Given their critical role supporting economic and social recovery, the COVID-19 crisis places financial institutions in the spotlight. One bank saw an increase of 30 percent in sales when there was an appropriate and timely (24-48 hours) human response compared to a purely digital journey. Generally speaking, the big four state-owned banks, thanks to their ubiquitous channel presence and massive customer base, have an easier time attracting deposits. McKinsey Global Institute (MGI) analyses the near future of the European retail banking sector after COVID-19. Use minimal essential Numbers updated as of April 23, 2020. Sorry, we couldn't find any results. McKinsey analysts and researchers have been tracking a tectonic shift in U.S. retail banking for some time. Consultancy giant McKinsey has recently released new research claiming that Blockchain technology is slow to enter the retail banking sector because of regulatory hurdles. The Future of Retail Banking 2020’s survey-based report on the future of the retail banking market has arrived. M&A can prove an efficient means to deliver such offerings rapidly to market. 3 With customer shopping behavior increasingly shifting online, helping SMEs scale their online presence, including facilitating digital point-of-sale loans or leasing, could also prove beneficial. North America. In the aftermath of domestic economic crises, both countries encouraged multinational companies to participate in retail banking, hoping foreign funds would build stability and increase capitalization. 2 McKinsey Quarterly. Advanced analytics can help identify relevant niches of prudent growth, but should be coupled with a transformation of digital sales journeys and marketing. A recent McKinsey article Marie-Paule Laurent, Olivier Plantefève, Maribel Tejada, and Frédéric van Weyenbergh, “, Ademar Bandeira, Bruno Batista, Adelmo Felipe, Matt Higginson, Frédéric Jacques, Frederico Sant’Anna, and Alexandre Sawaya, “, No going back: New imperatives for European banking. 6. We'll email you when new articles are published on this topic. Retail banks have long competed on distribution, realizing economies of scale through network effects and investments in brand and infrastructure. McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. Arguably, they face an urgent imperative to do so. Market and regulatory challenges are necessitating some major changes to banks’ distribution. McKinsey Financial Decision Maker Pulse Survey run in mid May 2020; countries surveyed include UK, France, Italy, Spain, Germany, Sweden, China and USA (1,000 representative consumers each). Select topics and stay current with our latest insights. Digital channels are gaining ground in the distribution of retail-banking products and services, but recent McKinsey research shows that banks are adapting at very different paces. In-branch staff duties will become more varied, evolving to include aspects of operations and call center work. McKinsey believes most new entrants are targeting the origination and sales components of banking, and estimate that in five major retail banking businesses – consumer finance, mortgages, lending to small and medium-sized enterprises (SME), retail payments and wealth management – from 10% to 40% of bank revenues will be at risk by 2025. Autoren: Philipp Koch, Max Flötotto, Ursula Weigl, Benjamin Köck, Dina Seilern … Forward-looking credit models can be re-engineered for increased accuracy using real-time transaction data, and also to reflect government actions by customer segment, sector, and geography. The challenge is not only to improve digital service journeys but also to minimize agent time spent on low-value activities suitable for “human-like” interactive voice response (IVR) resolution. The global revenue total for 2015 is an estimate. December 21, 2020 – The global banking industry is facing a long winter, ... November 24, 2020 – A joint report from McKinsey and the Euro Banking Association examines the options for banks in a changing landscape. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. projects a drop of 16 to 44 percent for Western Europe. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. tab. “Until a few year ago, U.S. regional banks enjoyed a comfortable incumbency in their regional markets,” McKinsey noted in a report. PwC Retail Banking 2020 Overview. In this piece, based on detailed research from McKinsey Panorama that was begun prior to the crisis, we look at how retail banking revenues related to customers of different generations vary across the world. This will involve accelerating the automation of credit decisioning, digitizing end-to-end customer lending processes, leveraging advanced analytics and automation to speed decision making, and time to cash (the latter being especially critical for SMEs). The calculated risk attached to this approach empowers leaders with judgment and character to make decisions at a sustainable speed. The connectivity of the Customer of the Future is a major retail banking to gain access to a stable and low-cost source of capital. 7. Their role in reacting to immediate needs—as more countries emerge from lockdown—makes it more challenging to prepare their organizations to respond and adapt to the next normal. Results as of 27 May 2020. Retail banks, like most companies, face an urgent imperative to reimagine themselves, with COVID-19 accelerating consumer behavior shifts and causing significant earnings challenges given the tough macroeconomic context and extensive risk of financial distress for both consumers and businesses. We see four primary areas of focus. Rewriting the rules: Succeeding in the new retail banking landscape 1 Retail banks have long competed on distribution, realizing economies of scale through network effects and investments in brand and infrastructure. hereLearn more about cookies, Opens in new Die Kunden suchen Beratung in unsicheren Wirtschaftszeiten, wenden sich aber auch vermehrt digitalen und mobilen Zugangswegen zu. 8 In this context, Western European and US retail banking leaders can reflect on four main questions: To enable their success in the next normal, banks can also consider how to rejuvenate their trust-based relationship with society, pioneering a new social contract in the face of COVID-19. The expected increase in digital banking adoption corresponds to a leapfrog of three years for the US and one to two years for countries like the UK and Spain when compared to historical data from the McKinsey Consumer Financial Pulse survey, Eurostat, and the FDIC National Survey. and in-branch kiosks), with limited cash availability at counters given dramatic recent usage declines. Should these emerging preferences become banking’s post COVID-19 “next normal,” retail banking distribution will experience up to three years of digital preference acceleration in 2020. 6 While the most common reasons German respondents cited for not using digital banking solutions were security and trust concerns, it is also true that online banking has not been seen as a necessity in a market with a bank branch around every other corner. Roles will expand and shift, necessitating the re-skilling of talent. Successful banks typically apply advanced analytics to identify niches of prudent growth, accurately predicting the best loan offer recipients, whose credit lines to increase, and who needs asset allocation assistance, thereby building stronger relationships while simultaneously helping customers optimize their finances. cookies, Safeguarding our lives and our livelihoods: The imperative of our time, McKinsey_Website_Accessibility@mckinsey.com, Banking models after COVID-19: Taking model-risk management to the next level, Addressing the needs of customers in delinquency impacted by the coronavirus, Beyond coronavirus: The path to the next normal. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Retail banking leaders can play a prominent role in shepherding the world toward economic recovery in a socially responsible manner, while preserving the health of their organizations. We envision relationship managers becoming location agnostic, performing most duties remotely. Retail banks in emerging markets derive more revenue from younger customers; the opposite is true in developed markets. 6 While the most common reasons German respondents cited for not using digital banking solutions were security and trust concerns, it is also true that online banking has not been seen as a necessity in a market with a bank branch around every other corner. By fast-tracking the transformation of sales journeys, banks can realize digital’s potential as the primary sales channel for new and existing customers. Citigroup has named David Chubak as its head of US retail banking. The need to find new revenue´s sources, the progressive digitalization of the sector and the changes in consumer´s behaviors will be key to reshape its business model and future strategy. Finally, retail banks can reorient toward digital by adjusting resource and investment allocations, making pragmatic technology decisions and rapidly upskilling the workforce to become more digital and data-fluent. Retail-banking revenues in this report include banking receipts from small- and medium-size enterprises but exclude private banking. Klaus Dallerup is a partner in the Copenhagen office. Marie-Paule Laurent, Olivier Plantefève, Maribel Tejada, and Frédéric van Weyenbergh, “Banking models after COVID-19: Taking model-risk management to the next level,” May 2020, McKinsey.com. Citigroup names David Chubak, 39 year old ex-McKinsey partner, as head of US retail banking Published Tue, Jan 7 2020 3:05 PM EST Updated Wed, Jan 8 2020 7:15 AM EST Hugh Son @hugh_son 4 Retail Banking in Asia, McKinsey & Company 5 European Banking Barometer, EY (2016) 6 Retail Banking 2020: Evolution or Revolution, PwC (2014) 7 European Banking Barometer. McKinsey Financial Decision Maker Pulse Survey run in mid May 2020; countries surveyed include UK, France, Italy, Spain, Germany, Sweden, China and USA (1,000 representative consumers each). Customers are engaged through their preferred channel and offered flexibility in future interaction, including via convenient remote capabilities. Meetings conclude with feedback sharing, sharpening future customer experience. payout from an app at ATMs etc. Ashwin Adarkar Senior Partner and Leader of Global Retail Banking Practice at McKinsey & Company Greater Los Angeles Area 500+ connections Kevin Sneader and Shubham Singhal, “Beyond coronavirus: The path to the next normal,” March 2020, McKinsey.com. The future of retail banking starts with the customer. Wie Banken jetzt am besten mit den neuen Herausforderungen und Chancen umgehen. Please try again later. In addition to an uptick in digital intent, there has been a decline across markets in consumers’ desire to visit branches for transactions—shifts that may stick for the long-term. Those responding to these trends with the same agility they adopted during the crisis will emerge better prepared for the future. Although other factors certainly enter the equation, retail banks should consider these emergent needs when designing new products and services. New skills and a new retail banking strategy are required to adapt to changing trends. McKinsey & Co published an article analyzing retail banking’s cautious approach to blockchain, especially in comparison to investment banks. These segments will require bespoke treatment across a broader palette of options, including engagement through a pre-collections multichannel offering. Interestingly, given many banks have successfully redirected front-line staff into urgently needed support roles—often working from the same location—this may change the equation on branch closures, enabling banks to keep more marginal branches open than previously considered, assuming advisors can be productively deployed on critical customer-related tasks. 4 | INNOVATIVE TRENDS IN RETAIL BANKING IN THE CONTEXT OF THE EFMA AWARDS, LET’S LOOK AT EACH OF THESE TRENDS IN MORE DETAIL. 1 Intelligent ATMs are kiosks with functionalities beyond basic services; e.g., video-banking/remote teller technology, rapid dispensing capabilities, contactless, card-less withdrawal with mobile advice, interaction between ATM and online systems and ecosystems, e.g. 6 McKinsey Retail Banking Consumer Survey 2018 Banking Consumer Survey. 9 For instance, in Spain the grocery, retail, and pharmaceutical industries are expected to experience relatively low demand shocks in 2020 and to bounce back quickly, whereas industries like leisure, hotels, and transportation will undergo high demand shocks and endure slow recoveries (Exhibit 3). We strive to provide individuals with disabilities equal access to our website. It is therefore critical that retail banks mobilize their plan-ahead teams now, prioritizing Reimagine responses as societies enter their Return phase. 12. M&A can also be an important lever, as “programmatic” acquirers have outperformed their industry peers in prior downturns. Meanwhile, the retail banking landscape has faced several challenges, including interest rate liberalization, major regulatory changes, and the rise of digital finance. Citigroup has named David Chubak as its head of US retail banking. McKinsey Financial Decision Maker Pulse Survey run in mid May 2020; countries surveyed include UK, France, Italy, Spain, Germany, Sweden and USA (1,000 representative consumers each). Auch vermehrt digitalen und mobilen Zugangswegen zu perhaps due to the next normal heart the. 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