Major Challenges Facing the Banking Industry

The growing prominence Fintechs have posed a threat, targeting some of the most profitable financial services areas. Goldman Sachs predicted that these startups would account for more than $4.7 trillion in annual revenue diverted from traditional financial services companies.

Fremont, CA: The banking industry is going through a drastic shift, driven by rising competition from Fintechs, disruptive technologies, changing business models, and mounting regulation and compliance pressures. However, the increase in data breaches, changing regulatory and compliance requirements, and privacy policies have posed several challenges for the banking industry.

Let us look at the challenges facing the banking industry:

Increasing Competition

The growing prominence Fintechs have posed a threat, targeting some of the most profitable financial services areas. Goldman Sachs predicted that these startups would account for more than $4.7 trillion in annual revenue diverted from traditional financial services companies.

Customer Retention

Financial services customers expect meaningful and personalized experiences through simple interfaces on any device, at any time, and anywhere. Although customer experience can be hard to measure, customer turnover is tangible. Banks can win customer’s trust and loyalty by knowing their customer and their expectations. Also, implementing an ongoing client-centric approach might help.

Changing Expectations

Today’s consumer is smarter, tech-savvy, and more informed than ever before. They expect a kind of banking experience that is tailor-made and convenient. Changing customer demographics play a significant role in these heightened expectations. Today’s generation has an innate understanding of technology. As a result, banks are striving to improve digitized experiences. Millennials have accelerated the charge to digitization. Hence, the use of mobile banking has increased dramatically.