The international banking industry will be reshaped by demographic shifts, stiffer competition and greater transparency of its policies in the next six years as these trends escalate pressure on banks to meet global demands, research firm Gartner said at its Financial Services Technology Summit in London on Tuesday.
To keep up with growing migratory patterns in which people today are pursuing cross-border educations, employment opportunities and leisurely pursuits, banks will need to develop electronic global servicing and be able to provide accounts to customers who temporarily reside in foreign countries, Gartner said.
In addition, the advent of regulatory mandates such as Sarbanes-Oxley, requiring greater transparency in accounting practices, as well as an increase in consumer awareness through on-line comparison services is shifting the power of information from the seller to the buyer, increasing client demands on banks.
These trends, combined with stiffer competition as the distinctions between different types of banking become blurred, is forcing banks to rethink their marketing and investment strategies, said Susan Landry, managing vice president for the banking industry at Gartner.
In particular, as large banks in invest in diversification and differentiation, smaller banks will have to focus on providing superior local services and specialization, Landry said.
Failure to adapt to these changes, will threaten the ability of banks to survive beyond 2012, Landry warned.
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