Five key takeaways from the 2019 State of Digital Sales in Banking Report
INDUSTRY INSIGHTS BY AVOKA (PART OF TEMENOS)
Over the past four years, we’ve seen a tremendous shift in digital account opening for banks across the world. When we first started the State of Digital Sales in Banking Report, only 20% of banking products could be opened digitally as banks struggled to adjust to shifting consumer behaviour. This year, we’ve finally seen years of digital transformation pay off, with over 57% of worldwide accounts featuring digital capabilities.
Below, we outline a few of the top takeaways from the 2019 State of Digital Sales in Banking Report, but you can find even more by downloading your own free copy of the report.
1. 65% of banks have reached the digital promised land
In the 2019 Retail Banking Trends and Predictions report, Jim Marous and Financial Brand surveyed a wide range of global financial services providers and found that 50% cited “customer-centric perspective and elimination of friction from the customer journey” as a top focus. Banks have invested considerable amounts of money over the past five years in digital transformation, and our new report found that 65% of banks have finally reached the Digital Promised Land as a result. 81% of banks have either started or plan to start a digital transformation strategy, so we predict this number will continue to climb next year.
2. Digital leaders have huge opportunity as business banking transformation lags
While 76% of personal banking products can be opened digitally, business banking lags significantly with only 37%. In 2017, Javelin found that while only six of the 30 top banks offering business banking services in the US, they owned 30% of deposits. Small business lending alone is a $700 billion market in the US, so banks looking to capture a share of this have a tremendous first-mover advantage by offering digital account opening before a vast majority of their competitors.
3. Wealth management lags as fintechs disrupt
Wealth management has seen perhaps the most disruption from fintechs with apps like Robinhood creating effortless account opening and investing experiences via mobile devices.
In a recent report, Statista predicted that assets under management of robo-advisors will grow at 27% CAGR through 2023, while traditional wealth management organisations like Charles Schwab are only seeing 10% CAGR. To keep pace, these companies must adopt a digital transformation strategy that makes customer onboarding as seamless as their new fintech counterparts.
4. Tremendous opportunity for digital transformation in personal banking across Europe
North America finally exceeded Australia this year in total personal banking digital account opening, but the most glaring takeaway from our 2019 report is that Europe’s personal banking digital transformation remained completely flat year over year.
It’s understandable that Europe’s largest banks are wary of undertaking a full-scale digital transformation since it’s estimated that these projects could take five years and cost upwards of $1 billion. However, the opportunity cost of lost customers and future revenue should outweigh these concerns, and since European banks invested roughly $80 billion in technology in 2018, we would have expected a much higher increase in 2019.
5. Digital and mobile gap continues to shrink
In 2017, digital account opening really meant online desktop account opening with only 50% of those products capable of being opened via a mobile device. Today, that gap has closed considerably where over 90% of digitally-enabled products include mobile capabilities. Mobile traffic surpassed desktop for share of all web visits in 2017, which means that banks must include mobile in their digital transformation plans in 2019 and beyond.
To get more insights into this year’s top trends, download your own copy of our 2019 State of Digital Sales in Banking report.
And if you’re interested in learning more about how Avoka (now Temenos) can help you achieve your digital transformation goals in 2019, please reach out to us.