The banking industry is undergoing a period of rapid change, driven by advancements in technology and changing customer expectations. As banks adapt to this new era of financial services, the landscape of banking is evolving in ways that are reshaping the industry. Over the past couple of months amidst a burgeoning economic crisis and geopolitical tensions, banks have been at the forefront of the turbulence. With underlying patterns of divergence between banks across the globe, substantially changing customer expectations, growing technological advancements, government and corporate sentiments towards sustainable financing and at the same time, concerns about greenwashing- 2022 has been a tumultuous year for banks.
Following the pandemic, the banks reached a 14-year high profitability in 2022 marking a global revenue increase of nearly $350 billion. This sharp rise is in line with the upsurge in interest rates seen in the wake of the economic meltdown. Currently, banks globally are functioning with the highest ever capital ratios of all time, somewhere between 14-15%.
One of the most significant developments in the banking industry in recent years has been the rise of fintech. Fintech companies, which use technology to provide financial services, have grown rapidly and are now providing competition for traditional banks. With changing customer expectations of convenience, automated services, and 24/7 support, services-on-the-go, fintech has proved to emerge as a major disruptor for traditional banking institutions. 3 out of every 4 consumers avail of money transfer and payment solutions offered by fintech, today. Fintechs have also aced the race by transitioning into providing non-traditional financing products like reverse factoring, dynamic discounting, and invoice financing. Thus, this is of critical importance for banks to envision such a transition in their products and services to remain relevant in today’s market. Banks must explore strategic partnerships with fintech to build upon their capabilities.
Technology is also playing a key role in transforming the way that banks operate. Artificial intelligence and machine learning are being used to improve customer service and personalize experiences. Blockchain and digital currencies are gaining traction, and banks need to explore how they can integrate these technologies into their operations. With the advent of Web 3.0, gamification of banking services is expected to be an emerging trend. With digitalization, banks need to evaluate their branch networks and explore possibilities beyond brick-and-mortar infrastructure.With JP Morgan becoming the first bank to enter the metaverse with its virtual lounge in Decentraland, several other banks and institutional investors followed suit.
The banking industry is also facing new challenges and opportunities as a result of regulatory changes. These regulations can have a range of effects on banks, including increased compliance costs, changes to business models, and limitations on certain activities. Increased capital requirements and stricter oversight are affecting banks, and the industry is responding by implementing new strategies and technologies to meet these requirements.
Sustainable and ethical banking is another trend that is gaining momentum in the industry. More and more customers are demanding that their banks align with their values, and banks are responding by incorporating sustainability and ethical considerations into their operations and services. Value-centered services will drive customer loyalty in the days to come.
Cross-border banking is another area where the landscape of banking is evolving. Cross-border claims increased by more than $780 billion in the second quarter of 2022. Credit to emerging markets is on the rise and has expanded by nearly $30 million. As the industry becomes more globalized, banks are facing new challenges and opportunities. Banks need to navigate complex regulatory environments and find ways to cooperate and coordinate across borders to provide effective and efficient services to customers.
In conclusion, the evolving landscape of banking is being shaped by a range of factors, including the rise of fintech, the impact of technology, changes in regulation, and the growth of sustainable and ethical banking. As the industry adapts to this new era of financial services, it will be important for banks to stay ahead of the curve and embrace change to remain competitive and provide the best possible services to their customers. Traditional banks need to relook at their strategies and reinvent better ways to function in the days to come.
As a leading business advisory firm, Knometrix specializes in providing solutions and expert insights on a variety of topics, including GTM strategy, advisory, and market intelligence. Our team of experts has a wealth of knowledge and experience in these areas, and we are ready to put our skills to work for you. If you are a bank or financial institution in need of solutions to improve your operations and wish to explore new areas of services, reach out to our team for expert insight and in-depth market entry research. Our team of experts is ready and eager to help you succeed.
Last year, three out of every five orders placed through e-commerce platforms were transported to purchasers in Tier 2 cities and beyond.
The government of India has recently indicated that the country intends to attain a USD 5 trillion GDP by 2025
India is now witnessing one of the most vibrant consumption-led growth periods as seen in recent times.
Here’s why insurance crucial for enterprises so crucial for small and medium-sized enterprises.
The retail sector is seeing the undercurrents of change as consumers' buying preferences continue to shift quickly.
Customer behavior and tastes are currently driving industry changes.
SMEs find it extremely difficult to remain competitive in the fast-paced digital environment of today.
Ranking 4th among APAC countries and Top 10 In Global Cybersecurity Index 2020 Rankings, India has been immensely vocal about its cybersecurity ambitions.
One of the fastest growing and most complicated markets, energy markets are of major significance in the global economy.
Adaptive AI is a type of AI that can change its behavior and decision-making processes based on new information and changing circumstances.
%20(1).jpg)
2022 marked the highest inflation rate in some of the most advanced economies in the world.
This year has been described as a year of change. There has been a wave of disruption and turbulence that has earmarked certain trends that are going to influence the sectors in the days to come.
Companies that use market intelligence are twice as likely to outperform their competitors. Research shows that market leaders view analytics as a major differentiator.
Business Intelligence (BI) augments an organization’s capability in decision-making and drives business growth.
Business intelligence (BI) refers to the collection, analysis, and interpretation of data about a company's operations, markets, and competitors.
India assumed its first-ever G20 Presidency on 1st December 2022 and will be hosting 200 events in 32 different sectors across 50 cities until the next G20 Summit to be held in New Delhi in September 2023.
Foreign Investment channeled into Asia has reached a record high exceeding $600 billion in 2021.
Technology remains to be the biggest trend for driving business transformation
In line with the United Nations’ Sustainable Development Goals 2030 and COP 27, as the countries pace up to meet the deadlines, similar trends are readily observed in the startup ecosystem.
Mobile Commerce or M-commerce is emerging as one of the most contending subsets of the E-commerce market.
The world is presently seeing the largest reallocation of capital in its history.
Sensory marketing, a subset of psychological marketing is all about appealing to one or more of your customer's five senses to uniquely position your brand or product, thus successfully driving their behavior, judgment, or perceptions
Valued at more than $5 billion in 2020, the global 5G technology market is growing at a CAGR of nearly 66% and is forecasted to reach a whopping $800 billion by 2030
The buzz behind Artificial Intelligence isn’t something new, but recently a category of AI- Generative AI has been making headlines.
United Nations Climate Change Conference more commonly referred to as the Conference of the Parties of the UNFCCC
Companies are readily seeking to envision a strategic
The Covid-19 pandemic has been instrumental to change
In this era of stupendous globalization,
Using digital technology is no longer meant for just driving solutions
The buzz around the term ‘blockchain’ gained gargantuan momentum in recent years.
Fintech is an umbrella term for describing all sorts of
The history of banking dates back to around 2000 BCE
The global economy is currently at an unprecedented level
Including more than 20 countries, home to nearly 60%
.jpg)
In recent years, there has been a trend in the emergence
In the wake of global market fluctuations and geo-political tensions
Two years ago, countries worldwide were concerned to overcome the pandemic
Metaverse- a term that first came up in Neal Stephenson’s 1992 science fiction novel - Snow Crash - which described life-like avatars meeting in realistic 3-D buildings and other virtual reality environments - is currently the favourite term of marketers.
Following the Covid-19 crisis, the alternative protein industry has seen a significant boost. The alternative protein market is anticipated to grow at a CAGR of 11.2% from 2020 to 2027 to reach $27.05 billion by 2027.
Historically being counted in the oil-country category, the United Arab Emirates (UAE) has been dramatically making its transition into being energy-focused yet finely attuned to technology.
