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The Future of Retail Banking: Keeping Up With the Pace of Change

In an age when the demand for instant access to financial services boasts an insatiable appetite, retail banking must continuously develop its processes to meet such a high demand. 

Neil Vernon, CTO, Gresham Technologies
Neil Vernon, CTO, Gresham Technologies

One man with valuable insight into changing landscape is Gresham Technologies CTO Neil Vernon. With a long history in development management and the market provision of enterprise-grade solutions, he has been responsible for setting product strategy and development, using his knowledge of reconciliations, cash equities, settlements and back-office technology to great effect.

Prior to joining Gresham, Neil worked within some of the industry’s largest organisations, developing leading-edge solutions in finance. Neil developed and took to market a combination of business activity monitoring (BAM) and complex event processing (CEP) products, and led product implementations at HvB, JP Morgan, ABN AMRO, and Lehman Brothers.

Here he discusses the significant period of change that retail banking is currently facing, and how the utilisation of data can greatly improve its processes.

The banking industry is being reshaped. Changes in consumer behaviour, technological developments, and regulatory requirements, are all creating new demands.

Consumers now want to open savings accounts in seconds, have a mortgage in minutes and open a business account with a click of a button. This demand lives alongside the proliferation of digital payments in the last 12 months as the switch from cash becomes a reality, regulation increasing and competition from nimble challenger banks and big tech companies is entering the world of financial services. There’s also the challenge of retaining customers and engaging in a way that suits them – especially as initiatives such as the seven-day switch in the UK have made it easier for customers to jump from one provider back to another. And negative interest rates and slowdowns in consumer spending across many markets threaten the profitability of retail banking services, increasing the pressure to innovate.

There’s a lot to keep banks on their toes. But there is a solution. Data. Relevant and validated data – that can be easily reconciled and controlled. Trusted data to base business decisions on. It’s having the right processes and controls around data that will be the foundation to ensuring banks can survive the change and evolve for the better.

Innovation held back by legacy tech and data

What is stopping innovation? The big challenge is innovative new products can require different kinds of control frameworks, with an agile, flexible approach. But behind the scenes, banks’ infrastructure and data make this difficult. Extensive M&A activity in the retail banking sector has created a tangled web of interconnected technology which is not always well understood, and left data siloed in different formats and systems. This puts those responsible for building controls on the back foot from the start.

Regulatory activity only adds to the pressure. Post-financial crisis, regulators have focused on ensuring that consumers have more knowledge of, and control over, their banking products and services. Whilst the industry has welcomed this, it also requires banks to have data and controls which allow them to say with confidence that these obligations have been met – and to demonstrate this to the regulator if required.

Banks also have to contend with increasing customer expectations – the ease, flexibility, and speed that we have come to expect across all areas of our lives, including banking. Firms are developing highly innovative solutions in response, but the controls which sit behind them must also support this desire for immediacy and excellence.

This is still relatively new to retail banking, and the greater the demand for immediacy, the smaller the window to manage any issues which might impact the customer. The consequences of a control failure are arguably more visible – and more severe – in the retail banking space due to the effect on individual consumers.

With one estimate suggesting that retail banks could expect at least a 20% fall in revenue, it’s clear that the pressure is on to do more with less. This is why automation for retail banking controls is an increasingly hot topic, freeing up staff to focus on more complex elements which require a human touch.

How data is reshaping retail banking

Whilst addressing years of legacy issues may be daunting, the key is to tackle the underlying issues that stop progress. It’s about having a data-agnostic solution, which can bring together data from multiple sources and siloes across your organisation. This is what will add value.  With the pace of innovation and change in the retail sector, the only approach that really makes sense is to have all your controls in one strategic solution, bringing together data from touchpoints and systems across your organisation. Not only does this increase efficiency, but it also increases the control that you have over your business in a fast-changing and demanding environment.

If you have the right data available at the right time, you can understand customer behaviour and be able to adapt at speed to their individual needs. Getting in control of your data puts you back in control of your destiny.


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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