January 31, 2012: As an after effect of the 2008 global recession, it has become very difficult for banks to carry out their banking activities. This observation was made by the analysts from Celent during their discussion on the trends in the banking sector across the globe. The banking sector in the North America and Western Europe are experiencing huge pressure, while the sector in Asia, Australia and Canada has started to perform better.
According to Bart Narter, VP, Celent’s banking group, countries such as Australia, China and Canada were in a better position during 2011. He noted that the US has improved its position with the stabilizing of the loan losses. However tightening of the regulations puts pressure on the revenue from the retail sector. Europe is still under the impact of the ongoing crisis.
In order to perform better, Celent says that the banks must make use of the existing customers to drive growth, and must take necessary steps to cut cost and thereby increase profit. Another driver according to Celent that will drive growth is the digital channels. It is gaining wide acceptance across the countries with the number of smartphones increasing everywhere.
The need to cut costs and the increase in the number of mobile and smart phones has made the banks to consider the digital options more seriously. In the present day the digital channel includes mobile banking, internet banking, tablets and personal financial management. These channels have been transforming or will continue to transform the banking sector. Banks across the world are working on developing mobile capabilities and spending on enhancing the internet banking experience on both retail and commercial fronts.
The increasing cost pressure has force the banks to replace the internally built systems with off-the shelf systems. It has also led to the banks adopting SaaS with the help of an external service provider, in an external cloud, or an internal cloud or in a dedicated outsourcing facility.
Outsourcing is not just limited to outsourcing of business process. It can also include shared systems, SaaS, internal clouds or external clouds. It is found that banks have become increasingly willing to make use of service from third parties to find solutions to their technological and operational problems.
The banks have started to pay more attention to analytics in an effort to mitigate risk and comply with the regulations. Now the banks have to understand the customers better with the data available or that can be made available. The data can be used to make them loyal customers and better market services to them and predict their behavior of the customers.