A focus on the changing Retail Banking landscape – Part 1
Why managing AI risk presents new challenges
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The difficult of using AI to improve risk management
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How to bring AI into managing risk
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Pros and cons of using AI to manage risks
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Benefits and opportunities for risk managers applying AI
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In the rapidly evolving landscape of banking and financial services, technology is visibly reshaping how institutions engage with their customers. Yet, the true drivers of future growth lie in strategic shifts that may be less apparent but profoundly impactful. The future success of retail banks hinges on their ability to derive “value” from a full customer lifecycle across a spectrum of products and services, departing from the traditional model where basic core banking offerings sufficed.
Customer relationships now extend beyond basic accounts and cards; banks must actively cultivate cross-selling opportunities and own the entirety of the customer journey. As each product or service carries distinct economic dynamics influenced by factors such as bank strategy, channels, and customer preferences, the concept of “value” needs a rethink for both banks and customers alike.
In this evolving landscape, banks must not only attract and retain customers but also encourage them to engage more deeply with a broader range of products based on where they are in their life. Young families require lending based products to buy their homes, and credit to finance their lifestyles, but empty nesters will naturally veer towards investment based products to make the most of their savings.
But retail banks want customers to self-serve, so this entails a concerted effort to transition customers to digital channels, which not only streamline operations but also enhance flexibility and responsiveness. In an environment where customers often hold relationships with multiple financial service providers, banks must fight for a greater share of their overall financial portfolio. Achieving this necessitates persuading clients to consolidate their financial needs within the bank, even as competition intensifies and customer expectations for personalized experiences escalate.
To stand out amidst competition and meet the evolving demands of customers, retail banks must differentiate themselves by delivering superior value propositions and in a commoditized market, service can offer differentiation based on the bundles of products and services that can be offered tailored towards the customer and where they are in their lives.
Moreover, customers increasingly demand the freedom to engage with banks on their own terms, whether through digital platforms, physical branches (which are now simply store fronts designed to sell), or a combination of both. Retail banks must navigate these complexities adeptly to carve out their niche, remain pertinent to their audience, and sustain profitable growth.
In this dynamic landscape, each customer represents a unique market segment, demanding personalized attention and tailored solutions. By embracing this customer-centric approach and understanding their financial needs, banks can foster long lasting relationships that drive sustainable growth.
