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Lafferty report identifies emerging trends in banking and considers 'likely future' of the industry

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2 December 2014, London: New technology challenges the banking business model but innovative banks can be optimistic

Innovation in Banking, a new report written by John Egan of Lafferty Group, highlights emerging industry trends and explains how banks can thrive in the new competitive environment. The report predicts a positive outcome for retail banks that use innovation to move away from an antiquated legacy structure and develop an efficient industry.
The report's stated intent is to provide 'a comprehensive understanding of the expanding banking environment, its protaganists and opportunities and the likely future of the industry.' It considers how the provision of traditional and new services is being stifled by the physical infrastructure and overhead of a bank while new start ups and adjacent players are able to 'cherry-pick' opportunities in the payments and lending areas, leaving banks to bear the burden of more capital intensive services

Areas considered include

  • The evolution of the customer
  • The implications of open systems and reduced costs
  • How new entrants are designing the front-end of banking
  • The growing importance of cultivating networks
  • Increased average frequency of transactions and its implications for the retail banking model
  • The increased use of data and technology to enhance delivery and customer service
  • The report takes a positive outlook on the future of banks that are able to utilise networks and employ innovative strategies.

    Report author John Egan said "Technology has systematically reduced the barriers to entry for every industry. The result is a wave of small competitors chipping away at traditionally exclusive retail banking margins and rapidly expanding the traditional remit of the sector. Innovative banks have reason to be optimistic. The challenge for them is how they redesign their structures to take advantage of technological change on an equal footing with new players. It is time for the banks to re-invent themselves and move away from antiquated systems, cultures and processes. We believe they still have a major role in the provision of personal finance, but their business model is likely to change. "

    Notes for editors
    Lafferty Group provides advanced knowledge services to the financial industry worldwide, including research reports, management reports, peer group councils, research databases and publications.

    For further information contact:

    Ronan Lynch
    Director, Global Knowledge Centre
    Email: ronan.lynch@lafferty.com
    Tel: +44 (0) 20 3008 8415
    or
    news@lafferty.com

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