As a result, in most retail-banking markets, a few large institutions, operating at similar efficiency ratios, dominate market share. Source: iStock/ultramarine5. In-branch staff duties will become more varied, evolving to include aspects of operations and call center work. Citigroup has named David Chubak as its head of US retail banking. They want seamless digital banking solutions embedded in their daily lives. Try removing some filters. Retail banks have recognised that customers are increasingly swayed by sophisticated apps. Examples of economic and social stewardship include helping customers understand their financial situation, rethinking credit strategies to ensure appropriate lending, creating dedicated financing lines to help business solvency, and remaining thoughtful about collections. Through these actions, banks can also anticipate peaks in monitoring and collections activity projected for the second half of 2020. 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. 5. Kevin Sneader and Shubham Singhal, “Beyond coronavirus: The path to the next normal,” March 2020, McKinsey.com. In the next normal, the percentage of basic banking needs handled in-branch could be as low as 5 percent. An online survey of 100 European retail banks by Efma and McKinsey shows a fast evolution of the retail banking lifecycle across Europe. A granular, country-by-country analysis of revenue per retail banking customer, for example, reveals significant differences in product opportunities (Exhibit 2). 1. Early evidence suggests that companies that were already embarked on an operating model transformation for speed responded more swiftly to COVID-19 and that there is a strong correlation between the level of agile maturity and rapid response in launching COVID-19-relevant products and services. They want seamless digital banking solutions embedded in their daily lives. Over the past 10 years, we’ve seen the industry take banking into the digital landscape, develop use cases for an explosion of new data, ensure compliance with PSD2 and GDPR, innovate payments and take on technological forces such as AI. 11 Such moves could help fast-track the continuous innovation and data-driven customer engagement necessary for success or enable banks to move into adjacent areas as part of a broader ecosystem play. 2 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. Please try again later. 7 This becomes a matter of finding new ways to help, rather than taking unnecessary risks—no one is served by losing access to financially stable banks. The article Customers Steer Digital Trends Driving Retail Bank Transformation reveals how the needs and expectations of consumers are forcing—and supporting—the digital transformation of banks. In the role, Chubak will head retail banking channels, including branches, wealth management, mortgage and small business, and risk management. Most transformations fail. To position for success in this new environment, speed is of the essence. hereLearn more about cookies, Opens in new Each of these roles will require digital and data fluency to effectively shift the customer interaction model. McKinsey Quarterly. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. The same lessons apply to in-person advisory conversations. PERSONAL FINANCE MANAGEMENT SOLUTIONS. Call centers may be transformed to remove up to 30 percent of less customer-centric and lower value-added activities. To better understand Chinese banking customers, McKinsey … Reshaping retail banking for the next normal. 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