Looking ahead: Consumer and bank evolution by 2025

By Jon Pearson, sales director, Feedzai

Bank leaders know that banking next year will look different than banking today. But banking seven years in the future is a downright alarming thought.

Still, while it’s tough to maintain a strategic outlook when rapid changes are happening right now, it’s important to remain forward looking. With that in mind, let’s explore a significant shift that will impact retail banks and what they can do in response.

Customers are evolving from digital centric to digital only

As the digital age continues to reign supreme, consumers will continually adapt to a digital style of living. It started with digital optional—the opportunity to accomplish something online or through a digital channel that could only be done before in person or over the phone.

Fast forward to now with digital centric—how a consumer’s life revolves around digital channels through their laptop, tablet, or smartphone. From learning to purchasing and more, consumers expect to accomplish their goals through digital first, save for a few aspects done on the phone or in person. Consider that a 2016 Accenture consumer banking study showed that +14% of respondents had switched to an online-virtual bank or payments provider, leaving their primary bank behind.

And by 2025, consumers will be digital only—if they aren’t able to do it online, they may not do it at all. Research performed by CACI underscores this future, noting that by 2022

  • Consumer visits to retail bank branches will drop 36%.
  • Mobile transactions will rise 121%.
  • Mobile will account for 88% of all bank interactions.

The primary reasons? Consumers want simple, seamless transactions with lower fees; better mobile apps, websites, or online channels; and less friction in their experience. It’s clear that as important as digital is now, it will only continue to become more of a requirement than a plus in the future.

Banks are attempting to become more digital

Retail banks are heavily reliant on consumer behavior. Thus, a shift like the one just described means banks are scrambling to retain customers and, subsequently, profits.

What does this look like? Mainly this has consisted of banks providing services through their website and mobile banking apps. Plus, to satisfy customers’ on-demand, anytime mindset, banks have increased staffing to ensure technical uptime of these apps, as well as customer service availability.

Of course, that’s not enough looking forward. But many banks are facing a number of blocks despite their desire for digitizing.

What’s holding banks back from going digital? Bank executives are citing legacy systems as an impediment to this need. In fact, nearly 40% of respondents in an Accenture banking operations survey place limited legacy systems at the top of the list of barriers holding their bank back from digital transformation.


In 2025, today’s customer is less tolerant of the shortcomings of “traditional” bank capabilities and behaviors, meaning digital transformation is a must. Unfortunately, many banks just aren’t there yet. A troubling PwC survey indicates that less than 20% of bank executives are prepared for strategic priorities such as “developing a customer-centric business model” and “enabling innovation.”

For the 80% of bank leaders who aren’t prepared, here’s a few recommendations for where to start on your path to digital transformation.

Incorporate or migrate to new technology

Banks must take advantage of the evolving industry reality to keep up with and outpace competitors. Currently, many retail banks are still dependent on legacy systems. Updating these systems is a slow and grueling process, requiring lots of technical hands in the cookie jar. For improved agility, banks will need to incorporate configurable technologies that are more “plug and play” in nature and that provide new capabilities to take advantage of.

Example technologies include:

  • APIs for more easily connecting with third-party systems and services.
  • Robotic process automation (RPA) to eliminate repetitive tasks and enable quick retrieval of bank data from repository systems for improved cycle times.
  • Artificial intelligence (AI) for identifying trading patterns from market data and even automating anti-money-laundering investigations.

Address evolving customer expectations for “more”

New technology like AI also opens the door for providing customers with greater convenience. With its ability to collect, analyze, and make sense of large amounts of data, using it to help customers is an easy proposition. For example, smart banks are using intelligent chat bots to answer customer questions with high levels of precision and speed, resulting in lower service costs. This is possible because AI can review bank data and thousands of past customer interactions to identify and formulate a relevant response.

Actions like this are necessary when you consider that challenger banks are providing sought-after features and behaviors to customers. Here’s a few examples:

  • More informed: Mobile-only Monzo offers real-time balance info to its customers.
  • More convenient: Moven enables peer-to-peer sharing through SMS (even if the other person isn’t a Moven customer).
  • More transparent: Soldo shows all its fees and limits upfront before signing up for an account.

Monzo also provides an enlightening use case for a traditional vs digital approach. In September of 2018, British Airways announced a data breach that affected nearly 400,000 customers (about 1,300 of which were Monzo customers). With a nod to its convenience and agility, within hours Monzo had sent replacement cards to those affected customers, along with an in-app message explaining what happened and what actions they should take.

Compare that to the approach most traditional banks would take in addressing an account-related event of this nature. The bank would send out a letter in the mail to alert affected customers, which would take days; plus, the customer may not check mail regularly at all. In addition, some customers may need come into a bank branch depending on the circumstances. This approach is of course much slower and disruptive to the affected customers, who are already inconvenienced from the breach itself.

We could write a book on the numerous actions banks must take to be ready for 2025. These are a good start though. But before putting your head down and getting back to work, ask yourself, Is our bank prepared for digital transformation?

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