Retail banks, torn between the opposing pressures of cost reduction and the need to invest in innovation, will begin to address the balance in 2013. According to a new report from Ovum, the consumer-driven digital economy and mobile revolution are the primary drivers of the “digital disruption” that fuels this need for innovation, with mobile payment solutions in particular set to continue to evolve and enter the market in earnest during 2013.

Efficiency and productivity will remain the banking sector’s mantra, however these will be driven more by innovation and service transformation than in previous years. Whether the bank in question sees itself as a technology company that does banking functions or as financial advisors, they will invest in innovation to meet the larger disruptions of the digital age or invest in more incremental innovation to improve process efficiency and customer experience. These customer experience enhancements will focus on creating a seamless cross-channel experience, incorporating digital communications driven by targeted analytics.

“While banks display continued uncertainty as to where to invest, 2013 will see many begin to cement their strategies,” comments Denise Montgomery, research director, financial services at Ovum. “In most cases, these strategies will be finalised in the next 12-24 months.”

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