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Cisco report highlights digital opportunities for retail banking

Cisco has announced a new research titled Roadmap to Digital Value in the Retail Banking Industry, which revealed that retail banks have the potential to realise $405.3 Billion from 2015 to 2017 as the Digital Value at Stake (VaS).

Mike Weston, Cisco
Mike Weston, Cisco

However, the report highlighted that in 2015, financial services as a whole captured just 29 percent of that opportunity. Of the challenges slowing growth and innovation, cybersecurity weakness is certainly at the forefront. Cybersecurity concerns have prevented retail banks from adopting digital technologies and business models. And this has contributed to them missing out on more than 70 percent of the potential revenue opportunity.

“With the pressing realities of agile ‘fintech’ disruptors, digital consumer demands, and complex regulatory hurdles, the question of how retail banks can compete and capture the revenue opportunity at hand has come to the fore,” says Mike Weston, vice president, Cisco Middle East. “As the largest segment of financial services, retail banks play a critical role in any economy. The ability for digital technologies to create and drive new revenue opportunities, combined with the ability to lower operational costs through digitised business processes, brings tremendous opportunity. But, too many banks are moving slowly or not at all. By waiting to digitise their businesses, or by delaying new technology initiatives, banks risk not only missing out on the potential Value at Stake, but are actually at risk for being put out of business altogether.”

The new research, according to Cisco, outlines the Digital Value at Stake for retail banking – as well as a digital roadmap for success. The study reveals digital use cases that drive the fastest value and return on investment for retail banks. With the right technology investments such as analytics, mobility, video, and virtualised delivery models – and with a plan for navigating security risks – retail banks can create a blueprint for capturing their share of the hundreds of billions in Digital Value at Stake.

The report further highlighted that “Fintech” startups are disrupting retail banks by unbundling their products and services. By doing this, they’re able to seize a share of the banks’ most profitable business while avoiding the barriers to entry that naturally come with being a full-service bank. These start-ups are digitising their offerings. Retail banks that fail to drive their digital transformation may be put out of business completely.

Cybersecurity concerns do not need to be a hindrance to digital innovation. Retail banks can transform cybersecurity from a liability into an asset that supports customer trust, innovation, and growth. All of these digital solutions depend on a robust cybersecurity foundation.

“By assessing, adopting and combining the right digital use cases for their needs, and doing it securely, retail banks will capture their share of the Value at Stake and be in a position to operate more agilely and compete. By innovating and driving relevant new products and experiences to the market quickly, they can be the new disruptors,” Weston concludes.

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