The consulting firm Accenture sees several challenges for Swiss banks. One is the proximity to their customers and the question of how they differentiate themselves from their competition.
Central banks exiting easy money policies and the return of positive interest rates will have a significant impact on banking in 2023, a study on current banking trends from Accenture concludes.
The turnaround in interest rates brings to an end an era in which financial institutions were focused mainly on offerings around isolated products that generated revenue even in a low-interest-rate environment. At the same time, it created opportunities and scope for new entrants such as fintechs and neobanks in recent years.
Customer Proximity
One of the key issues highlighted by the study is the relationship banks have with their customers. Among the trends listed in the study, this field affects several aspects at once, with digital banking severely limiting personal customer loyalty in recent years. Now it is a matter of the banks putting the focus back on overall customer needs. In terms of offerings, personalized and networked product and service packages are now in demand, according to the report.
The lack of human contact has undermined customer trust and encouraged bank switching. Accenture expects investments in physical bank branches to increase again in 2023 which requires training employees and offering products tailored to customers.
Problem-Solving Partner
The changes in market conditions caused by the turnaround in interest rates, high energy prices, rising inflation, and the economy have made it necessary to make adjustments in customer relationships. For the banks, this increased the risks already evident last year with higher loan loss provisions.
Now banks must focus on helping their customers solve their problems and banks that do so will perform better than their peers by not only minimizing losses, but by strengthening their relationships with valuable customers, the study says.
New Talent Strategy
The flexible working conditions established during the pandemic are in direct contrast to a bank's traditional work environment. Looking ahead, it means banks need to adapt their talent strategy to meet the new demands of their existing employees while remaining attractive to new talent.
The report also identifies the increased use of data generated in banking as another trend that needs to be seen as a driver of all of the bank's activities, rather than a by-product. Using and managing it well could create real added value for the company.
In addition, increased use of innovations and more partnerships or acquisitions of fintechs or start-ups are expected. with significantly lower valuations opening up possibilities.
Other trends mentioned are the metaverse and the modernization of core banking systems, which are long overdue at some institutions.
