With Covid-19 leading to an uptick in digital banking, nearly two thirds of industry executives from around the world think that the branch-based model will be dead within five years, according to an Economist Intelligence Unit survey.
Meanwhile, 65% of respondents view new technologies such as cloud, AI, and APIs as the trend that will have the biggest impact on the sector over the next four years – up from 42% three years ago.
More than 80% believe unlocking value from AI will be the key differentiator between winning and losing banks. A third of respondents are focusing their tech investments on AI platforms, including on digital advisors and voice-assisted engagement channels.
Jolted into action by the pandemic, nearly half of bank executives expect their businesses to evolve into ecosystems in the next two years, which will involve banks partnering with banking and non-banking third parties.
The pandemic is also leading to a new financial inclusion imperative for both incumbent banks and fintechs. A third of bankers view microfinance for entrepreneurs and accounts for the unbanked as the most promising inclusion-related business opportunities.