Gartner Group’s predictions for Banking sector

11/01/2010

Gartner's predictions for the banking and investment services in 2010, and beyond include: 

First prediction: by 2013, 75 percent of retail banks in North America and Western Europe will have shut down 10 percent or more of their traditional branches. Retail banks are shifting to non-local, franchised, multi-tenanted and virtual branches as the drive to improve efficiency and cost-to-income ratios will be constrained by the high fixed costs locked into large retail branch networks. 

Second Prediction: by 2013, 50 percent of banks will still lack a formal innovation program and budget, severely restricting growth potential. Non-banking competitors, such as retailers, online companies and telecommunications companies, are making inroads into the banking industry, leading the way with customer-oriented service improvements which customers will seek as economies of access improve. 

Third prediction: by 2013, 90 percent of bank services hub initiatives that are planned or under way will need to be re-architected on a global basis. Most banks that are undertaking payment, lending and treasury management services hubs (initiatives combining related standalone services on a single platform) are doing so in an isolated fashion without using common organizational services. 

‘Banking and investment services providers need to make a critical shift to a more outward-facing set of objectives for IT that are risk-aware but still innovative and bold,” said Gartner. “These institutions must now look beyond the fire-fighting of the current crisis towards planning for the eventual recovery and the new world that comes with it. If they don't, they will become uncompetitive and fall behind more-forward-thinking rivals.” 

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