The financial and sovereign debt crises jolted the global banking industry from a period of relative calm and prosperity into one of great uncertainty.
As the shock wears off and the industry adapts, key themes are emerging that will affect banking business models for decades.
We outline below eight major trends that are likely to shape banking to 2030 and beyond.
New economic challenges might push many nations to adopt protectionist trade approaches. This would affect the banking industry’s ability to enter or exit markets and constrain ownership structures and repatriation of funds.
Although the exact architecture of global regulation remains a work in progress, state involvement in both the structure and daily operations of the banking industry is inexorably growing.
Despite the obstacles of new regulation, this shift will also generate new business models as resource-limited governments welcome partnerships with institutions able to provide ideas, capital and operational skills.
Because most trade takes place within regions, global banks will need to leverage the expertise of strong regional partners. Tied to this theme, successful global banks in 2030 will also be known for their high service standards and long-standing client relationships.
By 2030, many markets currently dubbed “emerging” or “growth” markets will have reached maturity. In Asia, Latin America and Africa, a new set of high-growth markets will have taken their place.
Global banks will be able to compete in these markets, but they will need to carefully navigate local needs and regulations.
Demographics will drive the future of banking. Forecasts indicate that global inhabitants will surpass 8 billion by 2030, a population that will be ever more elderly.
New banking business models will be needed to serve this aging, and increasingly urban, demographic.
Customers are taking more control of their financial relationships, and this trend is unlikely to change. By 2030, banks will deepen their personal connections with customers via data analysis techniques that might seem fantastic by today’s standards.
From the outside, the business model for a single global bank in 2030 might look like hundreds of banks, each with a specific product that suits a discrete customer segment.
Technology is changing the payments segment of the banking industry at an extraordinary rate. Key developments include:
- Competition from non-bank Payment Service Providers (PSPs) offering services such as mobile banking
- Customer demand for quicker, cheaper, anytime/anywhere payments
- More transactions managed through exchanges affected by regulation of over-the-counter derivatives
- Heightened focus on systemic risk reduction and control due to post-crisis regulations
Political and environmental factors related to energy production, combined with new technology, will require new financial products. These are likely to encompass financing and fundraising support for large energy projects.
Analysis of population over 60 years of age, major countries×
Source: United Nations, Department of Economic and Social Affairs, Population Division (2011). World Population Prospects: The 2010 Revision
Analysis of urban and rural population, worldwide×
Source: United Nations, Department of Economic and Social Affairs, Population Division (2012). World Population Prospects: The 2011 Revision