About the 15th Edition of Innovation in Retail Banking Research
For banking leaders, staying competitive requires driving innovation—embracing new business models, enhancing digital engagement, achieving operational agility, fostering creativity, and harnessing advanced technologies such as cloud computing, AI, and robust security. But how far has the banking industry progressed in these areas? How are the objectives for banking in 2030 evolving? And what can we learn from the practices of leading, forward-thinking banks?
To guide banks through this complex and ever-changing landscape, we’re excited to unveil the 15th edition of the Innovation in Retail Banking Report. In partnership with Infosys Finacle and Jim Marous this flagship report draws insights from over 130 global banking executives, offering a comprehensive look at how financial institutions are navigating a challenging yet opportunity-filled environment.
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The global banking industry stands at a pivotal crossroads after significant investments to advance digital maturity. While foundational elements are in place, the path forward remains complex and multifaceted. Banks must continue to innovate across several domains: adopting new business models, enhancing digital engagement, achieving operational agility, fostering an innovation-centric culture, and integrating advanced technologies like cloud computing, artificial intelligence (AI), and enhanced security measures. Additionally, they face a more stringent regulatory landscape focused on resilience and customer protection.
80% of banking executives believe embedded banking will drive over half of transactions by 2030
This year’s research captures financial institutions’ progress as they navigate a challenging yet promising environment. For instance, only 11% of banks believe they have managed to scale transformation initiatives and achieve expected outcomes. This indicates that although most banks in the survey are advancing digitally, so are their goalposts. Banking executives believe that the market’s dynamism will sustain through 2030: 80% believe embedded banking will drive over half of transactions by 2030, 80% anticipate that 75% of enterprise banking applications will reside in the public cloud, 85% expect AI to become ubiquitous in the industry, and 90% foresee cybersecurity threats and budgets more than doubling. Furthermore, 70% predict that non-incumbents will secure over 30% of the retail banking market share, highlighting a fiercely competitive landscape.
Key insights from the Qorus-Infosys Finacle Innovation in Retail Banking report 2024
Key findings at a glance
Transformation challenges: Only 11% of banks report successfully scaling their transformation initiatives, underscoring the challenges of sustaining digital progress.
By 2030:
- 80% anticipate embedded banking will drive more than half of all transactions
- 80% predict 75% of enterprise banking applications will be hosted in the public cloud, while 85% expect AI to become ubiquitous
- 90% foresee a significant rise in cybersecurity threats, with budgets expected to more than double
Competitive pressures: Non-traditional players are projected to capture over 30% of the retail banking market share by 2030, intensifying competition across the sector.
Three focus areas to energize innovation
Rethinking business models
Banks adopting digital business models are better equipped to meet evolving customer expectations. The report identifies three key archetypes expected to dominate by 2030: digital-only offerings, financial marketplaces, and banking-as-a-service. While progress has been made in compliance and data management, challenges remain in vision clarity, process agility, and co-innovation.
Scaling innovation capabilities
Strategic use of both established and emerging technologies is key. While banks see value in open APIs, cloud, and AI, over 80% of IoT and immersive media initiatives fall short. Cloud deployment preferences vary due to operational, regulatory, and legacy system challenges. Banks prioritize AI investments that enhance business outcomes and customer engagement, but only 16% consider their application architecture best-in-class, highlighting significant room for improvement.
Redifining innovation capabalities
Non-banks have driven innovation in certain segments, redefining value creation. Banks can improve by innovating products, reimagining customer experiences, and adopting new ecosystem partnerships. There’s a need to enhance digital engagement and mature AI initiatives, particularly post-onboarding. Banks also have opportunities to innovate in products like cards, wealth management, and non-traditional offerings.
