Key banking trends for 2021 – a global perspective
Our series of events with Accenture got off the flying start last week, with the first of four events focusing on the predicted key trends likely to affect banking in 2021.
Accenture’s Head of Global Banking Alan McIntyre zoomed in from Connecticut and was joined by his colleague Stewart Chalmers, who is the Head of Financial Services for Accenture in Scotland. Alan provided fascinating insight into the global landscape of banking and key trends to look out for this year.
All of the trends are interlinked by one overarching theme: acceleration. The Covid-19 pandemic has brought about unparalleled transformation, and the question for banks of all shapes and sizes going forward is; how quickly is too quickly?
With this in mind, here is a summary of the top 10 trends to watch in banking this year.
- Go big or stay home: The Covid-19 recovery will compress profits for years to come. As such, 2021 is likely to be a big year for mergers and acquisitions, which will reshape the banking landscape for many markets.
- The neo-normal: 2020 was a challenging year for some neo-banks. Traditional banks managed to close the digital gap, and there was a decrease in venture capital. 2021 will favour the best traditional banks and the best neo-banks.
- Twilight of the banking apps: 2020 may be the peak for dedicated banking apps. Big tech companies are accelerating their move into financial services, and standalone apps are being overtaken by OS-native banking
- Radical Transparency: 2021 will see package products retaining less value, and a push for more radically transparent products with a new marketing advantage
- Getting the credit: What happens with credit when the crutch of government disappears? With the pivot to a digital economy and a surge in e-commerce, new credit opportunities are created. Data driven credit management will separate the best from the rest
- Cash is not king: Cash payments have decelerated drastically in 2020. This may lead to a decoupling of banks and cash handling, and a growth in specialist cash-handling businesses.
- A green inflection point: Funding for fossil fuels has gone up every year since the Paris Agreement. 2021 is likely to be the year this changes. Banks are beginning to make bold commitments and COP26 will likely be a catalyst for a broader desire for genuine change.
- The uncertain world of US regulations: The US regulatory landscape is likely to change under the new administration, but just how it changes remains to be seen
- The rise of a digital regulator: 2021 could see the birth of a new type of regulator as digital becomes the norm
- No more fluffy clouds: Cloud technology is evolving rapidly, boosted by the need for increased need for digital connectivity.
The full report on these trends can be downloaded from Accenture’s website here, where there is also a podcast interview with Alan.
The SFE and Accenture event series will look at the impact of Covid-19 across global financial services. The next event on April 28 will discuss the recovery of the global economy and whether it will get worse before it gets better. Further details and registration for future events can be found here.