The banking industry has been going through a radical shift. Primarily driven by competition from FinTech and disruptive technologies, this radical shift is changing the way banks are doing their businesses. Banks now have to meet stringent regulation and compliance requirements, meeting changing customer demands, and conform to changing business models. For the executives, it means that they have to embrace these changes to remain effective. Let’s look at 7 challenges banking executives must overcome in 2020 and how coaching can help.

1.Regulatory Compliance

Getting into 2020, regulatory compliance remains a significant challenge in the banking industry. The recent years have seen a dramatic increase in regulatory fees compared to credit losses and earning. Complying with all the changing laws and regulations means that banks will continue to strain their resources. Non-compliance can result in severe consequences, including additional risks and costs of implementing necessary control to satisfy compliance requirements.

Coaching can help banking executives to overcome regulatory compliance challenges in several ways. Executives can learn ways of implementing formal compliance systems and structures. Coaching also helps in fostering a culture of compliance within organizations to help them avoid repercussions for non-compliance.

2.Digitized Cultural Shift

Artificial Intelligence (AI) is continuously being accepted in the baking landscape. As banks shift to more digital culture, manual processes and systems will be wiped out. This means that banking executives need to think of technology-based resolutions to their challenges. Experts in this industry believe that AI will continue transforming every aspect of the baking processes. It provides a wide range of solutions from customer verification to automated wealth management. As the industry is gravitative to this new way of doing business, executives will need to deal with a change in culture.

Coaching in 2020 will help banking executives promote a culture of innovation in their institutions. This is a culture where technology is leveraged to optimize their existing processes and procedures and achieve maximum efficiency.

3.Changes in Banking Business Models

The evolution of the banking business models is not stopping anytime soon. Due to increased competition and an increase in compliance requirements, businesses in the banking industry are continuously changing the way they do business. Some of the key drives to these changes include increasing cost of compliance management, decreased proprietary trading, decreasing return on equity, and sustained low-interest rates. While these factors affected the sources of banking profitability, the expectations of shareholders remain unchanged. Therefore, banking executives have a duty to transform their business models to retain their profitability levels.

Through coaching, banking executives can identify new opportunities in the market. They earn skills needed to rationalize their business lines, create new competitive service offerings and achieve sustainable improvements in banking operations. With the need to adapt to changing demands being mandatory, executives must gain the skills to keep their businesses on a profit trendline.

4.Customer Retention

Based on recent trends, banking customers demand personalized and meaningful experiences. As competition in the industry increase, customers are becoming fiercer by the day. They are looking for companies that offer simple and intuitive interfaces that can be accessed on any device at any time. They want greater personalization, easier access to services, and more automated services. The biggest challenge is quantifying such customer experiences and identify ways of reaching that level. While customer turnover is always tangible, customer loyalty remains an endangered concept. With customer loyalty being such a difficult concept, banking executives need to find ways to retain their customers and meet their expectations.

Coaching for banking executives imparts skills to know the customer better and engage with them accordingly. In 2020, there is a need for executives to optimize how customers interact with the financial system. The goal is to reach higher levels of customer satisfaction and convince them to keep coming back.

5.Security Breach

Security breaches are not about to become a thing of the past in 2020. Looking at the past few years, there have been a series of high-profile security and data breaches. To date, security remains to be one of the leading challenges of the banking industry. In fact, financial institutions must invest heavily in the latest technology to assure the security of their customer’s sensitive data. While new cybercrimes are being introduced every day, the technology landscape is changing quickly. Banks have now to deal with new challenges like blockchain technology integration and big data management.

Banking executive coaching is more than just strategy formulation. It also covers vital information on data security and measures such as end-to-end encryption, address verification service, and authentication measures.

6.Increasing Competition

The entrant of new players in the banking industry is pushing competition to the roof. Among the major players affecting competition in the banking industry are the FinTech companies. These companies are targeting some of the most profitable financial services, giving bans a run for their money. For every new Fintech company that enters the industry, a portion of revenue is diverted from the traditional financial services companies like banks.

Banking executive coaching can help them build strategies to navigate through these changes. One of the effective strategies is seeking acquisition and partnership opportunities with other players in the industry. Maintaining a competitive edge in 2020 means that banks must be willing to work and learn from FinTech companies. Most of these companies are winning a big market share simply by providing an intuitive and simplified customer experience.

7.Outdated Banking Technology

Technology in the banking industry has been changing progressively. In 2020, banks will have to come up with solutions for some of the outdated mobile experiences. Having a branded mobile application is no longer effective in meeting the needs of the customers. You need to think of a fast and easy to use mobile experience for your customers.

Through coaching, banking executives can identify what customers really want and the relevant technology to achieving this. Some emerging technologies like voice-enabled digital assistants, live chat, and use of bots is providing effective in serving customers better. As mobile banking apps become popular, executives need to figure out which features are being wide sort out by customers.

Bottom Line

The recent changes in the banking industry prevent unique and diverse challenges to banking executives. It is important for executives to understand these challenges and what they mean to their businesses. With the right coaching, it is possible to chart a clear path forward and put the right measures to overcome the challenges.