For the fourth year in a row, I have reached out to some of the most respected global leaders in the financial services industry to ask for their thoughts around upcoming banking and credit union trends and predictions. As in the past, the response was overwhelming, with more than 60 responses from our crowdsourcing panel in the U.S., U.K. and the Asia Pacific region.

This year’s list includes an advancement on some of the trends we have seen in previous years, with new trends and predictions in the areas of digital delivery, mobile, customer experience, payments, innovation, operations, security and product design. How any institution responds to these trends may differ by organization, but none should be ignored.

Each financial services industry contributor provided at least one thought, with many sharing multiple predictions around the disruption occurring in the industry. My goal was to consolidate their thoughts and come up with the trends that were considered the most important.

Two of the most omnipresent trends evident in this year’s predictions were the heightened use of customer insight for the delivery of services and an enhanced customer experience, and the continued development of digital channels and associated digital services.

All of the contributors concurred that the changes in the industry in 2015 will be driven by increasing consumer demands combined with continued competition from outside the industry. It was also universally believed that the financial services industry is playing ‘catch-up’ and that there could be many organizations left behind or consolidated due to an inability to respond to consumer expectations and/or cost and revenue challenges.

The Top 10 Retail Banking Trends and Predictions for 2015 are:

Using Customer Analytics to Drive Contextual Experiences Expedited Deployment of Digital Delivery Mobile-First Design Increasing Digital and Social Selling Mass Market Acceptance of Mobile Payments Focus on Security and Authentication Industry Consolidation Enhanced Customer Incentivization Investment in Innovation, Incubation and Uncommon Alliances Increased Impact of Digital Disruptors

1. Using Customer Analytics to Drive Contextual Experiences

According to Capgemini’s 2014 World Retail Banking Report (WRBR), less than 40% of customers globally reported positive customer experiences with their financial institution. With upcoming generations of consumers fully embedded in mobile, digital, and social media as a way of life, interaction expectations are changing.

In 2015, banks and credit unions will leverage richer analytics-driven insights to enable a more personalized approach to targeting and engaging with consumers. From location-based offers to improved service delivery, organizations will use spending patterns, product use, and channel interactions to enable improved experience-driven banking.

“In 2015, we will see signs that we are moving into the ‘age of wisdom’, where information alone won’t be enough.”

— Scott Bales

According to Scott Bales, founder of Metlife futureLab and author of the book Mobile Ready, “In 2015, we will see signs that we are moving into the ‘age of wisdom’, where information alone won’t be enough. Successful companies will be looking for scenarios, options and intelligence to drive more productive businesses and relationships. This will be the catalyst for a rush to item level data in the payments business, and behavioural data pre and post purchase.

Bryan Clagett, chief marketing officer at Geezeo, agrees that data will be more important, “The financial services industry will move beyond omnichannel banking and more fully realize that FIs can use data and interactions, regardless of channel, to genuinely connect with consumers on a more emotional level. This is includes predicting consumer needs and serving in more of an advisor role.”

Tim Pannell, President/CEO, Financial Marketing Solutions, adds “2015 will see a continued search to meaningfully maximize data for increased marketing efficiency and customer loyalty development.”

More than just a way to improve customer communication, advanced customer analytics will assist throughout the organization according to Jenni Palocsik, marketing director, retail financial services at Verint, “Increasing customer expectations – as well as consumers’ ongoing ‘disregard’ for the limitations of existing (and outdated) banking silos – will force retail banking organizations to provide employees with contextual data for smarter consumer engagement, and provide management with robust analytics for ongoing decision-making and for mitigating regulatory risk.”

Michael Carter, vice president of D3 Banking adds that there is a financial benefit to improved use of consumer data, “To monetize their growing digital channels, leading financial institutions will focus on how to use the immense amount of structured data they have about the consumer. Those that succeed at this will see more positive impacts to their top and bottom lines than they ever have or will from that shiny object called ‘big data’.”

“Optimally, financial institutions will establish a digital ecosystem around consumers’ data that will benefit the consumer’s wallet in a positive way, not only changing advertising, data analytics and e-commerce, but also allowing for a better understanding people’s intimate relationship with their money and improving it,” added U.K. based Duena Blomstrom, chief marketing officer at Meniga.

Going one step further, Neal Cross, chief innovation officer at Singapore-based DBS Bank believes artificial intelligence for customer service in on the near horizon.

2. Expedited Deployment of Digital Delivery

“The increasing pace of digital adoption will see more innovation from large banks in their digital strategy – and simultaneously the reshaping of branch networks and front line roles to re-position physical distribution as a strategic asset in the digital omnichannel world,” Accenture stated in an exclusive interview with The Financial Brand. These smaller, digitally transformed, primarily self-service branches will increase advisory services and provide new revenue opportunities for financial institutions.

Forrester Research predicts the use of online video for both sales and service will increase significantly in 2015. They also believe next year will see banks and credit unions experiment more with other uses for video, such as video tellers in branches and using video banking to provide a human touch via remote touchpoints.

“We believe the greatest competitive advantage that established firms have is to use digital touchpoints to enhance interactions between customers and employees”

— Peter Wannemacher

The desire for an improved customer experience will bring retail technology to bank branches according to Peter Olynick, Card & Payments Practice Lead for Carlisle & Gallagher Consulting Group. “Leveraging new technologies, like beacons, will allow branch personnel to quickly recognize the customer, predict the reason for the visit and perform outstanding customer service,” states Olynick.

In the rush to self service and digital delivery, it important to digitize the employee, and not just the branch, says Forrester’s Peter Wannemacher. “We believe the greatest competitive advantage that established firms have is to use digital touchpoints to enhance interactions between customers and employees,” says Wannemacher.

Danny Tang, Channel Transformation Leader, Global Banking & Financial Markets at IBM agrees, “Banks will expedite the deployment of omnichannel, in particular the use of tablets in the branches (i.e., face-to-face interaction assisted by digital experience) and video chat on mobile devices (i.e., digital experience enhanced by face-to-face interaction).”

To support advisory services, banks will begin to leverage their own version of the robo-advisor phenomina currently taking place in the investment advisory industry, according to Nick Bilodeau, managing director, Quantum. “Banking organizations will provide similarly automated, algorithm-generated advice to (1) better serve clients and tighten relationships across product lines, (2) more effectively up-sell/cross-sell, and (3) reduce servicing costs on lower-balance clients.”

David Gibbard goes a step further in his belief that 2015 will be the beginning of the emergence of the ‘customer interface and customer experience platform,’ where all banking products, services and transactions will be on a single platform that provides both customers and staff with real-time automated end-to-end access, workflows, decisioning, and execution.

The way banks define digital today centers on browser-based banking, mobile apps and tablet apps. Eventually, digital delivery will extend beyond these channels and devices. “Digital will start to be redefined with emerging form factors like smart watches, smart TVs and also laptops that can run native software similar to the way phones and tablets run apps today,” states Matt West, global account executive at Provo-based MX.

Jelmer de Jong, global head of marketing at Backbase believes that the transformation of delivery channels must begin immediately. “More and more neo banks are launching, mostly backed by traditional multinationals. These neo banks have a strong focus on omnichannel delivery and customer experience because these are the areas lacking with most existing banks. 2015 should be the year to match or exceed the benefits of neo banks and focus on making omnichannel real vs a buzzword by delivering a true, unique and authentic digital banking experience.”

3. Mobile-First Design

The banking industry is still well short on harnessing the power of mobile, beyond just a channel or technology. Many of our crowdsourcing panel believe 2015 will be the year when leading banks will use mobile design strategies as the foundation for all customer touchpoints, and when expansion of capabilities will provide digital differentiation.

Mike Dudas, chief revenue officer and co-founder of Button states, “Major bank/issuer apps will continue to improve, expanding core functionality beyond balance checking, ATM locator and mobile deposit to value added services such as digital money management (see Moven and TD Bank), personalized offers and connections to mobile commerce apps.”

“There will be a shift from using mobile as a cost reduction tool to a way to expand share of wallet and become central to a consumer’s financial life.”

— Matthew Wilcox

“Mobile apps will go beyond banking … and banks will offer different flavors,” offered Jeanne Capachin, principal of Capachin Research. “For example, an app for people buying a home will have home prices, mortgage rates, and advise from specialists. It’s all about selling mortgages, but selling with an experience that offers advisory services – not just low rates.”

Matthew Wilcox, senior vice president of marketing strategy and innovation at Fiserv, agrees that the most significant change in financial services will be the shift in digital banking strategy from a self-service delivery channel to a full-service delivery channel that can support all aspects of a customer’s financial management. According to Wilcox, there will be a shift from using mobile as a cost reduction tool to a way to expand share of wallet and become central to a consumer’s financial life.

But succeeding in the mobile space is more than just adding new features to an already inefficient and ineffective platform. It is about making the features already in place easier and more user friendly. It is about making sure there is a clear roadmap for development and deployment. It is also about leveraging customer insight to maximize the power of mobile capabilities.

One example of an underutilized capability is mobile alerts. Brett King, CEO/Founder of Moven and author of several books including Breaking Banks says, “Mobile notifications are the main game in town … it’s all that matters in 2015. Notifications are driven off data, and deliver insights, but will quickly evolve into a real-time revenue capability. So, if banks aren’t building this in 2015, they’re slipping behind.”

At the end of the day, what you offer on mobile may not be as important as how it is offered. Simplicity, clarity and responsive design will be important to the digital consumer moving forward. In fact, a minimalist approach (like Uber) may be a good starting point. Jin Zwicky, VP of experience design at Singapore-based OCBC Bank believes that the ‘beauty imperative’ in financial services will begin to differentiate offerings. According to Zwicky, AppleWatch is a great example of how the tech sector is embracing fashion. She believes beauty is also important in designing financial channels and products.

4. Increasing Digital and Social Selling

Forrester Research has found that many banks continue to have too little in the way of marketing, merchandising, and product research tools available to prospects on tablets and smartphones — and too little mobile cross-selling to current customers. They predict twice as many customers will research financial products on their smartphones and tablets in 2015 compared to 2014, however. The percentage of customers who apply for a financial product via mobile will also grow — though not by as much — as more banks support this option for mobile-savvy consumers.

Leading banks already offer effective marketing and sales functionality within their mobile apps, such as campaigns on the landing page of smartphone apps or using augmented reality to give home buyers property prices, closing dates, and estimated current values on the go via a smartphone app. The key will be to combine customer analytics with mobile delivery to drive sales.

“A big trend in 2015 will be the use of predictive data to drive demand and understand the marketplace in a more timely manner.”

— Charlie Tarzian

According to Sam Kilmer, senior director at Cornerstone Advisors, after years of decreased spending (as % of assets) on both marketing and remote delivery, mid-sized banks will reverse the trend in 2015 with significant new digital sales/origination investments and improved non-transactional digital engagement and outreach like social media, money management tools/alerts, education, and financial counseling.

At the same time, Jim Perry, senior strategist for Market Insights, Inc. believes we’ll begin to see an exodus from social media (especially Facebook, YouTube & Twitter) by smaller banks who entered the space without a clear strategy for customer engagement and who, consequently, have seen little benefit to the ongoing expenditure of staff time and talent.

Charlie Tarzian, strategic consultant at Prelytix believes the key to sales success will be predictive analytics. “A big trend in 2015 will be the use of predictive data to drive demand and understand the marketplace in a more timely manner. The whole notion of PQL’s (Predictive Qualified Leads) will find their way into the conversation and finserv companies will begin to invest in the infrastructure necessary to integrate the datasets necessary for this very compelling evolution.”

But having the data and finding customer segments to target won’t be enough says Jay Kassing, President MARQUIS. “Big data and analytics is only the starting point. It is important to pair this insight with marketing automation that deliver the right message to the right consumer at the right time.”

The collection of this insight for sales will be made easier with mobile imaging and proximity marketing. “More consumers will use the option of snapping a picture to open a new account, apply for a credit card, or provide information for other new services,” predicts Michael Diamond, chief revenue officer at Mitek. “In fact, with proximity marketing, financial services will even be able to reach consumers at the moment and location they want financing.”

The ability to reach the customer with the right digital message will also enhanced since the wall between a financial services company’s internal data and external paid media is coming down. According to Paul Kadin, Head of Category Development for AOL Advertising, consumer “signals” will be collected holistically from internal and external sources and interpreted for smart messaging, providing an ‘omnichannel programmatic’ platform for communication in the future.

Claire Calméjane, head of the digital centre of excellence, innovation and partnerships at Lloyd’s Banking Group in London believes there will also be further successes in the sharing economy as more consumers benchmark products online, connecting through their social networks. For instance, for insurance, startups such as friendsurance or the soon to be launched Inspeerme offer a peer to peer insurance network. By a dynamic exploitation of social and online data, companies like these offer more personalized services that can completely change the competitive dynamics in financial services.

“These new forms of interaction will be especially important to the digital-first, Gen Y consumer, who value advocacy, not advertising and conversation, not clichés and who are shaping financial brands and defining their success now and into the future, offered Gina Bleedorn, executive director at Adrenaline. “Millennials will make it clear which bank services they are willing to pay for … they will unbundle and cherry-pick,” added Steven Ramirez, CEO of Beyond the Arc, Inc.

While the digital consumer will have greater access to digital and social shopping tools, that doesn’t mean they will be entirely satisfied, however, according to Nicole Sturgill, senior research director of retail banking at CEB TowerGroup. “Our research shows that as a banking consumer becomes more digitally-focused, they are less likely to consider their financial institution as a source of advice.”

Finally, the use of mobile email marketing and online video will continue to rise as banks and credit unions integrate and humanize their digital channels. “With higher mobile email open rates and higher engagement (time spent reading the email) as well, more organizations will leverage this channel,” says financial industry consultant David Gerbino. The power of online video is the ability to personalize each contact, nurturing leads through the sales funnel and onbaording new accounts. “Banks and credit unions who apply the art and science of storytelling within their video planning and production methods will find the greatest success,” according to James Robert Lay, CEO of CU Grow.

For a Deeper Analysis, Buy the Guide to Multichannel Onboarding in Banking

5. Mass Market Acceptance of Mobile Payments

With new services like Apple Pay, mobile payments are likely to become increasingly commonplace in 2015. According to Capgemini’s 2014 World Payments Report (WPR), m-payments are projected to grow at 60.8 percent in 2015. However, until mobile channels are fully integrated with back-end support systems, banks will continue to struggle to drive value from mobile.

Still, David Brear, director of digital banking at Gartner believes the most significant changes in the FS industry in 2015 are going to come in the payments space. Brear believes banks and credit unions are going to have to make moves in 2015 to re-establish their direct communications channels with customers with regards to payments or come to terms with the impacts of services becoming commoditized and marginalized. “Banks need to force themselves to find their secret sauce when it comes to payments,” says Brear.

Many Crowdsourcing Panelists agree with Neal Cross from DBS Bank who said, “If Apple Pay is successful, it will define the future for mobile payments for the financial services industry.” Thailand-based John Owens, senior policy advisor on digital financial services and financial inclusion, goes a step further in a NextBank Facebook post, “Apple Pay will be a big hit and will drive a new shift in mobile payments in both emerging and developed markets. In particular, the method of tokenization on mobile devices will expand mobile payments in developed markets much more rapidly than in 2014.”

“We will see changes at the retail point of sale as merchant adoption of EMV and contactless terminals increase.”

— Dominic Venturo

“2015 is going to be a breakout year for bank payment innovation,” according to Jill Castilla, President and CEO of Citizens Bank in Edmond. “Apple Pay was a wake-up call for bankers – our industry will realize that the drive for new products, increased payments speed and flexibility in payment options needs to start from within or non-traditional providers will fill the void. The push to change our traditional payment rails to accommodate ‘bullet trains’ will amplify this year.”

“Mainstream mobile payment adoption will prompt financial firms to rapidly build more engaging and innovative payment experiences for their customers,” says Eric Pasia, Digital Practice Lead, Carlisle & Gallagher Consulting Group: “With Bitcoin, Apple Pay, and better peer-to-peer payment solutions, consumers will easily integrate device-driven payment experiences into their daily lives and will find greater preference for these simple and seamless ways to transact with businesses and their personal/social networks over any other form of mobile payment.”

Banking executives will face key decisions about how to collaborate with Apple Pay in 2015, without the organization taking a back seat to an Apple-controlled ecosystem. Unfortunately, too many banks have yet to define a clear retail payments strategy.

Beacon technology might still be the one area of payments that is flying under the radar in terms of having a breakthrough next year. According to Will Hernandez, editor for Mobile Payments Today, “Retailers seem keen on improving the brick-and-mortar experience and beacons can certainly help to ping consumers with relevant offers. That, in turn, should lead to an increase in mobile payments at the point of sale.”

We will also see changes at the retail point of sale as merchant adoption of EMV and contactless terminals increase, states Dominic Venturo, chief innovation officer for payments at U.S. Bank. He also expects to see wearable devices move from the experimental category to consumer facing solutions … though he believes initial solutions may be relatively basic.

Alex Bray, retail channels director at Misys Banking Systems also believes we will see some early innovation in smart watch payments in 2015, though he doubts this will have a widespread impact initially. He still believes banks need to understand how they will provide an equally good or better experience for customers sooner rather than later.

Aite Group senior analyst, Ron Shevlin believes consumers (and retail banking) will continue to treat Bitcoin as a novelty, but he believes laying the groundwork to use Bitcoin to address the inefficiencies, risks, and compliance issues for B2B payments and cross-border payments will emerge as a significant development in 2015.

Industry observer and frequent social media contributor, Deva Annamalai agrees with Shevlin. “The significant change I foresee for 2015 is the disruptive innovation of the BlockChain technology going mainstream. This decentralized technology truly has the power to change the way we do international payments, micropayment, money movement, smart contracts and real world asset tracking. The invention of Bitcoin is a watershed moment in payments and the Fintech industry.”

6. Focus on Security and Authentication

Mobile identity authentication has become more important for financial institutions as consumers migrate away from online banking to smartphones and tablet. Consumers’ changing preferences, combined with emerging technology, has forced financial institutions to take a closer look at how they identify and authenticate mobile banking users when they log into their account. A 2013 Norton Report about cybercrime revealed inefficient authentication methods are among the primary reason for mobile fraud incidents. And consumers are not doing their part to safeguard their information on those devices.

“The ability to make secure, authenticated in-app payments is the game changer, not the ability to wave a phone to buy a coffee.”

— David Birch

Dave Birch, director at Consult Hyperion, predicts that Apple has, effectively, decided the model for the next phase of technology-driven evolution in retail payments. “Apple has created a model — local strong authentication with a revocable standard token — and established that devices will be the bridge between the product being purchased and digital identity. The ability to make secure, authenticated in-app payments is the game changer, not the ability to wave a phone to buy a coffee,” says Birch. He adds, “Tired: Tap and Pay. Wired: App and Pay”

William Sullivan, head of global financial services market intelligence at CapGemini also believes there will be more uniform approaches to digital identity in 2015, which will help address increasing digital ID theft, fraud, and money laundering.

7. Industry Consolidation

The Federal Deposit Insurance Corporation’s Summary of Deposit (SOD) Report shows that the total number of offices managed by FDIC-insured institutions peaked in 2009. Since then, the total number of offices has declined by 4.8 percent to 94,721 offices. The FDIC report also details that the most precipitous year-over-year drop in the number of offices occurred from 2013 to 2014, with most asset-size groups showing a decline in the number of offices in operation.

“Mergers will pick up, driven largely by sellers realizing that they can’t grow their top-line revenues.”

— Sam Kilmer

Industry consolidation (mergers and/or acquisitions) has had the greatest impact on FDIC-insured institutions with less than $300 million in assets. Correspondingly, these institutions are reporting that they manage fewer branch offices. At the other end of the spectrum, some larger institutions have closed some of their unprofitable branches or sold off a number of their branches to smaller asset-sized organizations that are eager to enter new markets.

Most of our crowdsourcing panel believe consolidation within the financial services industry will continue or possibly even increase in 2015. Scott Bales not only believes we will see some larger traditional bank consolidation, but also more deals like BBVA/Simple, as large institutions look to indemnify and acquire key digital assets.

Our panel believes all sized organizations will be impacted by consolidation. Sam Kilmer from Cornerstone believes mergers will pick up, driven largely by mid-sized sellers realizing that they can’t grow their top-line revenues. Community banking consultant, Lori Philo-Cook believes many more community banks will agree to sell or will acquire other banks in order to have the capital, resources and expertise needed to address compliance/regulatory challenges, revamp/expand their delivery systems and offer enhanced mobile and online banking services.

Sarah Snell Cooke , publisher and editor of the Credit Union Times, believes leadership retirements and the resulting turnover may result in consolidation within the credit union industry as well.

Not surprisingly, none of our crowdsourcing panel through the financial services industry was going to be in an expansionary phase in 2015.

8. Enhanced Customer Incentivization

Industry veteran, Andy Will believes 2015 may be the first time in over ten years that we will see the Fed actually increase rates. If past rate cycles are any indication, he believes the Fed will proceed cautiously, taking rates up only 25 BPs at a time, with purposeful pauses in between each increase to gauge aggregate impact.

While no one can predict the ultimate number and rapidity of the next round of Fed rate increases, spread improvement could represent the largest near-term revenue improvement opportunity for banks in over a decade. On the other hand, the demand for consumer deposits may be more fierce than ever, with a premium placed on retention.

“In 2015, banks will be more actively testing relationship and customer-level pricing schemes, to use price as a lever to drive deeper relationships.”

— Sherief Meleis

Sherief Meleis, managing director at Novantas, predicts that this potential for a rate increase will result in a renewed emphasis on relationship deposits to make up for potential churn and to keep deposit rate ‘betas’ low if rates rise. According to Meleis, “In 2015, banks will be more actively testing relationship and customer-level pricing schemes, to use price as a lever to drive deeper relationships.”

Accenture believes that as banks continue to embrace digital, we will see many organizations begin to explore how to create customer value and interaction outside of core financial products, starting their journey towards being the center of a consumer’s financial life. Harriet Wakelam, head of customer experience at Medibank in Australia believes the industry may move towards a recognition of new forms of value, and mutuality. “We will start to see incentivization that moves outside the financial services circle, with the potential to be rewarded for being healthy.”

Jeremy Foster, CFO, BancVue, believes that if rates rise slowly and for a long period of time, rewards-based deposit accounts will again be in vogue, with enhancements being delivered through digital channels.

9. Investment in Innovation, Incubation and Uncommon Alliances

As the industry continues to be impacted by agile start-ups and niche players, banking organizations are beginning to think more like disruptors, obsessing about consumer experience and using digital technology to avoid being outflanked by new entrants or established competitors. This has resulted in the development of innovation labs, fintech investment funds and uncommon alliances between traditional financial institutions and start-ups. 2015 will see a continued expansion of these strategies.

According to Bradley Leimer, head of innovation at Santander Bank, “Whether it’s alternative financing, the rise of robo-advising, or new methods of value transfer through cryptocurrency platforms, banks should focus on adjusting to a new paradigm, a differing customer value proposition, and be open to a wide spectrum of burgeoning opportunities. It’s critical as technologists that we remain curious, and focused on these growing alternatives – in order to facilitate innovation inside our banks by continually reaching outside for ideas through collaborative development and investment.”

“Banks should focus on adjusting to a new paradigm, a differing customer value proposition, and be open to a wide spectrum of burgeoning opportunities.”

— Bradley Leimer

Billy Robins, vice president of business development at PayNearMe, predicts that aggressive banks (outside the Big 4) will continue to look externally to drive innovation through partnerships or acquisition. “These deals can span from improving mobile products to small business lending much like the partnerships or acquisitions between TD+Moven, Lending Club+Union Bank, OnDeck+BBVA Capital One+Adaptive Path and BBVA+Simple. Darren Negraeff from Canadian-based Zafin, adds that this drive to digital is actually a drive toward customer centricity – knowing who your customers are and being able to provide customized pricing and services to them.

Eric Lindeen, marketing director, Zoot Enterprises, Inc. agrees that 2015 will be the year financial institutions will be infusing non-bank innovations and technologies into their operations to bring about radical change. He predicts more banking app stores, innovation centers that cut across silos, and partnerships with FinTech startups will ‘shift banking from an obligation to enabling a preferred lifestyle.’

Unfortunately, building an innovation lab or building non-traditional partnerships is only half the answer. According to JP Nicols, co-founder of the Bank Innovators Council, half of those new efforts may be mothballed for a self-described ‘lack of clear ROI’. “Innovation is about more than whiteboards and minimum viable products, and most banks are ill-equipped to move from ideation to actual implementation, and fewer still are prepared to truly address their internal cultural barriers and their own ‘business prevention departments’,” says Nicols.

Elizabeth Lumley, editor of Finextra has an even more dire outlook. “Many innovation labs are forced to act like large scale IT suppliers and profile ‘proof of concept’ projects that mimic the ‘five years of P&L’ most bank IT departments demand to deal with a supplier. Furthermore, the ‘startup’ can become so reliant on the bank ‘as their one big client’ they never become the agile, innovative, multi-client development house they intended to be, making the entire structure of the ‘innovation lab’ an agent of its own destruction.” (ouch)

Claire Calméjane agrees with Lumley, stating that in order to deliver significant value, innovation labs need to fully align with the corporate strategy, not operate in isolation!

Finally, Andra Sonea, solutions architect for Lloyds Banking Group, believes that financial organizations will have to start building the “dumb pipes” in order to enable the building of digital APIs and 3rd party apps. She predicts that solutions will be very different from bank to bank depending on their existing architecture and appetite for change.

10. Increased Impact of Digital Disruptors

Digital disruption has impacted the financial services industry on a global basis. Most disruptors are smaller niche players that won’t grab substantial market share from traditional banks in 2015. That may comfort some executives disruptors threaten profit margins by ‘eating around the edges methodically. The biggest threat is that banks lose the daily connection with consumers and businesses and the flow of customer insights trickles to a stop.

But there are some digital organizations that have appeal to the digital consumer. In fact, Dan Liebau, founder of Lightbulb Capital, believes that more customers of traditional banks will move to new and completely digital players in 2015.

“The battle for the digital customer will only increase in intensity.”

— Michael Carter

To partially negate the impact of disruption, traditional banks need to become disruptors themselves. As mentioned above and articulated by crowdsourcing panelist, Michael Carter fromD3 Banking, “The battle for the digital customer will only increase in intensity. Leading banks and credit unions will need to look to new and non-traditional allies, partners and vendors to gain a competitive advantage rather than choosing to work with established legacy FinTech providers who struggle to commercialize innovations due to size.”

There will also continue to be an influx of new players outside the traditional banking community that will be vying for investment dollars and partnerships as the potential to combine finance and digitalization increases. “I believe 2015 will see a variety of innovative startups and existing companies launching new protocols and financial products and services based on Blockchain and the side chain technologies,” offered Deva Annamalai.

As mentioned by Mark Zmarzly, founder of start-up Hip Pocket, “The biggest thing that will advance retail banking in 2015 will be the amount of funding that comes into FinTech. In 2013, there was $3B in funding invested in FinTech, but in October of 2014 alone there was $1B invested. The more money that pours into FinTech the more innovation the industry will see and thus have to adapt to in order to stay relevant.”

Summary

Chris Skinner, Chairman of the Financial Services Club and author of the book, Digital Bank, predicts that 2015 will see banks finally focusing upon getting fit for the digital future by rearchitecting their back office systems, cleansing their data and creating accessible digital services that are consistent across channels. He believes the trends for front-end developments across mobile and tablets will eventually extend into wearables and connected channels (cars and televisions). Finally, he sees many banks moving towards Skype-based video services, or equivalent, as branch footprints and transaction-based jobs continue to decline and are replaced by remote digital services.

“2015 will see banks finally focusing upon getting fit for the digital future by rearchitecting their back office systems, cleansing their data and creating accessible digital services that are consistent across channels.”

— Chris Skinner

Tim McAlpine, president of Currency Marketing in Canada stresses that in 2015 and beyond, financial institutions with strong board governance will separate from those with poor and ineffective boards. He emphasizes that boards and senior management teams that fully understand technology, collaboration and risk management will lead their institutions to success. Those that don’t will simply follow the unchallenged whims of their senior managers.

Banks and credit unions will recognize that technology (mobile banking, p2p, pfm, etc.) is not sufficient to singularly drive revenue growth and real customer engagement, adds industry consultant, Serge Milman. Unfortunately, he believes many organizations will continue to resist meaningful changes that address core challenges, continuing to hope for ’the high tide to lift all boats’ while disruptors carve out the lucrative pieces of customer value.

Joe Sullivan, CEO of Market Insights provides one word for the changes expected in 2015 – Intensification. He foresees an intensification of digital banking features and usage, digital payments, usage of data and analytics to drive engagement and an improved customer experience, competitive disruption, and increased branch/channel rationalization.

A Note of Thanks

I would like to take this opportunity to thank the 60-member crowdsourcing panel that assisted in the development of this annual report. The insight shared was extraordinary and the continued support of this effort is greatly appreciated.

I would also welcome any comments or discussion around 2015 trends believed to be missed or shortchanged. Nobody’s perfect, and it would be great to receive even more insights for the readers of this article.