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Exploring Retail Banking Trends: A review of Q1 2024 and our future projections

Explore the latest Q1 trends shaping retail banking, with insights from our expert team.


Sarah has extensive experience in digital transformation, customer experience, strategy and change. She has worked broadly across the financial services industry including retail and private banking.

Sarah Carver
Head of Retail Banking, Wealth & Insurance

1. Gen AI: Gen AI has dominated discussions across the industry with AI positioned as the silver bullet to increase productivity, increase revenues and reduce cost.

Our Take  

  • Innovation in Gen AI shows no sign of slowing down and the technologies will be transformative for the retail banking industry.
  • It will influence the entire value chain from the products offered to the experience customers receive.
  • Maximising these gains will only be possible if banks effectively structure and utilise their data and set up their underlying operations correctly from a people, process, and technology perspective.
  • We’d also advise retail banks to review their usage of AI, including from an ethical and regulatory standpoint, as international standards, e.g. the European Union's AI Act (AIA), come into play.

2. Hyper Personalisation: Customer expectations will continue to increase regarding how they are serviced and the value of the products and services they receive.

Our Take  

  • Hyper personalisation is an obvious win for all parties, as better serviced customers equals improved retention, revenue growth and regulatory compliance, with regulations such as consumer duty.
  • However, implementing it requires advanced data analytics, a dynamic strategy that involves keeping an eye on competitors and another on innovation and differentiation.
  • AI will present an opportunity to assist with this, but retail banks should be careful to not lose customer intimacy and ensure they service clients through their chosen channels. ​

3. Regulatory Landscape: The evolving regulatory landscape with the strongest focus on consumer duty and consumer protection.​

Our Take

  • Financial services organisations will need to adapt to constantly evolving regulations and compliance requirements.
  • We expect the strongest continued focus of 2024 to be on consumer duty and consumer protection, but we will begin to see a bigger focus on AI regulation as we move to the end of 2024, as banks look to get ahead of the AIA.
  • Note: this isn’t just an incumbent issue, we include Fintech’s as the regulators are increasingly heightening expectations of what they expect from the Fintech's and challengers.

4. Digital Assets: Reshaping the retail banking industry as consumers increasingly adopt digital currencies and explore decentralised finance (DeFi) platforms.​

Our Take  

  • Digital assets, including cryptocurrencies, stablecoins, and tokenised assets, are beginning to make an impact.
  • This presents both an opportunity and risk to retail banks. Regulatory uncertainty, volatility, and the gap in consumer education remain challenges.
  • However, the banks which navigate the compliance requirements while educating customers about the risks and benefits of digital assets will have an opportunity to improve efficiency, create new revenue streams and stay relevant in the digital era.

5. Strategic Sustainability: Is becoming the focus for retail banks, an evolution of what had been a more tick box and less comprehensive view of ESG (Environmental, Social, and Governance)​.

Our Take  

  • Retail banks are integrating sustainability into their strategies with 75% planning on increasing spending on ESG initiatives.
  • A more holistic approach is now being taken, focusing not just on environment sustainability, such as office energy consumption, but embedding sustainability into the full strategy - from tech to governance procedures.
  • It’s also increasingly being viewed as an area for competitive advantage, with retail banks wanting to differentiate via sustainability, enhancing customer trust but also turning ESG related products into revenue opportunities.​

6. Cost Takeout: Retail banks are looking to structurally remove cost whether through Gen AI, optimised pricing, tech and cloud adoption or utilisation of outsourcing and managed services.

Our Take  

  • With the recent challenging macroeconomic environment, cost discipline has become key.
  • At a time when retail banks are looking to increase spending in technology, they are also having to react to cost to income ratio pressure.
  • Banks will need to balance this creatively, ensuring they embed sustainable cost optimisation rather than just cutting cost.
  • We also expect to see an increase in usage of managed services for non-differentiating parts of the banks, enabling retail banks to structurally reduce costs whilst avoiding the drawbacks of traditional business process outsourcing (BPO) deals.​

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