Top takeaways from Retail Banking 2018

The future of retail banking and navigating the evolving financial services landscape

by René Dufrene, General Manager of Finance Industry Solutions, AT&T

Retail banking and credit union professionals from throughout the United States met this week to network and learn about the importance of remaining agile in an ever-changing marketplace in the financial services industry.

Retail Banking 2018, the notable annual conference sponsored by American Banker, attracted 350 industry leaders to Colorado Springs from April 9-11.

From big picture presentations to targeted workshops, professionals in the retail banking industry were offered the opportunity to examine how best to respond to financial customer needs, to address market demands, and to embrace new growth opportunities — including those offered by digital transformation and edge technologies.

The panel discussion, titled “Trends, transformation, and technology opportunities for banks and credit unions,” addressed the overarching issues impacting financial institutions of all sizes. In addition to myself, the panel included:   

  • Kimberly Munsell: Industry Specialist, AT&T (moderator)   
  • Stephen Walker: Lead Analyst, Financial Services, Global Data   
  • Patrick Sullivan: Senior Director of Global Security Strategy, Akamai

The wide-ranging discussion explored flexible strategies and best practices for back, middle, and front office innovation.

Top trends driving performance

Walker kicked off the discussion with his thoughts on the major drivers of dynamic performance for banks and credit unions. These drivers include:   

  • Most consumers are still visiting a branch to open an account, rather than going online (a strong indicator that branches continue to hold an important position with the public) .  
  • Banks are strengthening their reputations as trusted, secure providers to counter the increase in cyberattacks faced by the finance industry.   
  • Technology is enabling ever-greater ways for banks to provide highly personalized services to their clients.

“While the scale and pace of change in regulations, new entrants, and consumer behavior have been fast-paced,” Walker said, “many of the fundamentals have remained relatively continuous.”

Retail banks are open to transformation

When asked for my perspective on why retail banking is ripe for change, I pointed to rising customer expectations in-branch and online.

Consumers expect a superb and consistent banking experience from all channels. Banks, credit unions, and consumers are fast-adopting mobile and online technologies, and driving the repurposing of the physical branch.

FinTech (from the words, “financial” and “technology”) companies are capitalizing on consumers’ increasingly digital lifestyles and strong affinity to social networks. With a strategy centered on customer acquisition, FinTechs provide the digital experience that consumers demand.

Technology drives growth and requires new security strategies

I was asked to share my thoughts on how banks and credit unions have been impacted by technology. I pointed to three key areas:   

  1. Many banks are seeking consulting services to help them design and build a digital ecosystem without disrupting client services or opening themselves up to breaches.   
  2. Cloud and network virtualization are key components of legacy modernization aimed at delivering a seamless, integrated set of services: from ATMs and payments to wealth advisement and loan management.   
  3. Cybersecurity is a central concern in an industry focused on regulatory compliance, especially because banks and credit unions are entrusted with customers’ critical, highly sensitive information. New technology requires making sure financial businesses have a strong cybersecurity strategy in place.  

Impacts and benefits of moving to the cloud

When asked for his perspective on moving to the cloud, Sullivan said digital transformation creates improved efficiencies, but also exposes banks to increased cyber risk. Recognizing that risk, many banks are moving to a Zero Trust security model, which calls for strict verification protocols for anyone inside or outside of the institution.

“A Zero Trust model is based on the concept that banks shouldn’t automatically trust anyone who is attempting to access the network,” Sullivan said.

Asked how banks can best balance a strong cybersecurity program with great user experience, he said little room exists for compromise. According to Sullivan, “only when moving systems to the cloud do we see that both security and performance are able to operate on a relatively high level.”

Strengthening the community/neighborhood branch

The ability to improve the customer experience through digitization is key to increasing revenue.

Technologies such as digital signage, Wi-Fi, tablets, and collaboration tools can enable branch staff to optimize client interactions, increase cross-selling for higher value services, and personalize financial advice. In the end the goal is to create a better experience for customers.

Looking to the future

Munsell ended our panel discussion by emphasizing our unanimous position that managed change can only strengthen the retail banking industry. We agreed that energy should be directed into building and supporting new ideas and processes that will securely carry the retail banking industry into the future.

AT&T is a leading provider of integrated solutions for business, powered by the global network with more secure connections than any other provider in North America. To learn more about digital transformation in the finance industry, visit our Financial Services solutions page.