Gone are the days when the focus areas for banks were largely M&A and growth. In addition to ever increasing regulatory and compliance obligations, banks are grappling with new technologies and innovations that affect the way in which banks interact with consumers.
Payment technologies continue to advance, with improvements in the security of contactless payments and increasing adoption of electronic peer-to-peer payments. Partially as a result, banks have access to more information about their customers' behaviour, yielding data and analytics that can be exploited across all banking functions. Of course, the collection and use of "big data" dovetails directly into the need for banks to focus on cybersecurity.
According to the 2015 Banking Outlook report by the Deloitte Centre for Financial Services, the introduction of the Apple Pay mobile payment solution will spark growth in contactless payments, potentially reducing the role traditional banks play at the centre of the payment experience. As the Deloitte report observes, this may cut into interchange revenue and brand recognition and accordingly banks must look for ways to increase or maintain revenue by differentiating their customer experience and developing innovative strategies to use customer data to push customized promotions.
The increasing importance of data analytics and data management, in an era of hyper-focus on cybersecurity, has resulted in many banks appointing a Chief Data Officer to both manage data and security exploit it across business functions. The Deloitte report concludes that "monetizing data to dive increased revenues could begin to become a reality" in 2015 "especially in more mature institutions that have put in place appropriate analytical capabilities and governance."
Banks will, of course, continue to pursue M&A opportunities and increase the typical revenue-generating activities (deposits, fee-based services), but they will also focus on establishing their role in the payments space, exploiting their deep wells of customer data, with an eye on security.
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