Ten years after the financial crisis, banks are no longer overwhelmed by regulatory change programs or consumed by compliance requirements. In 2018, they are turning toward growing and optimizing their businesses. To do so, banks must become more digitally enabled and effectively collaborate with new, innovative partners. In other words, they need to become more digitally mature.
In our Global Banking Outlook 2018 survey of 221 institutions across 29 global markets, we asked banks to assess themselves against five stages of digital maturity: not pursuing, beginning, transitioning, maturing and digital leadership. Few banks consider themselves maturing or a digital leader today, but more than half aspire to be digital leaders by 2020.
Digital leadership is required to fully capitalize on dramatically rising growth expectations. In our survey, 12% of respondents expect double-digit revenue growth in the next 12 months, rising to 31% over the next three years. Similarly, 7% of respondents expect more than 9% profit growth in the next 12 months, rising to 23% over the next three years.
Regionally, banks are pursuing growth differently because of varying outlooks.
European banks are less optimistic and they continue to face muted revenue prospects. Mainly, they hope to improve financial performance through efficiency initiatives, including greater automation.
North American banks are optimistic and they are investing in strategies to increase market share, as well as increasing fee income in certain areas. They are also investing in digital capabilities to enrich the customer experience.
In Asia-Pacific, strategies vary. Japanese banks are pursuing inorganic growth strategies in overseas markets. Australian banks are focused on strengthening their positions in domestic markets. Chinese banks expect their country’s “belt and road” infrastructure and trade initiative to support their regional growth plans.