What will global financial firms look like in the future?

This could be a revolutionary moment for the global banking industry. A variety of different challenges and opportunities are coming together to make this a critical period in banking. To survive and ultimately thrive in the coming decade, banks will need to embrace emerging technology while remaining flexible enough in order to adapt.

The future of retail banking

Shifting consumer demands are changing the face of retail banking. Retail banks are launching platforms in the Banking-as-a-Service (BaaS) space in order to stay competitive. BaaS allow non-bank businesses to embed financial services into their products. To make this possible, banks will create their own platforms or work with third-party providers.

Technology is also being used to drive down the operational costs of banks, making them more competitive in the process. Mobile banking is likely to become increasingly popular for any bank serious about remaining competitive. The younger generation of consumers is increasingly likely to identify mobile banking as a deciding factor that determines their choice of financial institution.

New players who offer digital-only services are challenging the more established players, many of whom are struggling to make the shift towards mobile services fast enough. Investors are keen to find out how banking chiefs intend to respond to digital transformation.

ESG to the fore

Commercial and retail consumers are increasingly prioritizing ethical issues in how they run their companies and their lives. Financial institutions are developing their environmental, social and corporate governance (ESG) agendas as a result. ESG initiatives are likely to move from the fringes of the sector into the mainstream over the coming years.

A new vision for UniCredit

One banking group that’s been in the spotlight over recent years is UniCredit. In April 2021, investment banker and storied dealmaker Andrea Orcel was named CEO of the group, Italy’s second-largest commercial bank. Since then he’s outlined a set of goals and guidelines for how he’ll run the bank and his aims over the coming few years.

Orcel sees technology as playing a key role in the future of the bank, as he seeks to streamline its operation and deliver on ambitious growth targets. In his December strategy update, Orcel pledged to generate dividends for shareholders worth at least $16 billion euros over the next four years. To deliver on this promise he has set a target of 10% growth.

Orcel recognizes that the bank needs to invest in technology to help speed up the group’s digital transformation. In time, it’s hoped that these technologies will deliver significant savings while helping the group

Orcel is also keen to champion the ESG agenda at UniCredit, recognizing the role that banks can play in setting the agenda. He hopes that in time UniCredit can become an ESG exemplar, helping its commercial clients develop their approach to ESG issues.