European Banking Trend Radar

Article

European Banking Trend Radar

A structured process to identify, categorize, and monitor trends

The unprecedented situation since the COVID-19 pandemic hit Europe has once again highlighted change dynamics, with banks needing to adapt rapidly to new trends and drivers in the market. This has inspired us to set up a systematic process for trend monitoring and evaluation in banking to help market participants navigate uncertainty. In our new series of articles, we will shed light on the key trends and drivers in the European banking market.

Why does systematically monitoring trends in banking matter?

In a world that is constantly changing, market participants need to cope with uncertain future developments. The dynamics of change force companies to adapt rapidly in several dimensions, such as technological advancements, changes in culture and society, climate challenges, and economic developments. In the wake of the COVID-19 crisis, uncertainty increased even further. However, banks frequently struggle to adapt quickly and successfully to new developments since it is almost impossible to predict how the numerous and often interdependent trends and drivers will affect the market. Some benefit the banks, others disrupt business. 

The challenge of anticipating future developments and the impact on the market highlights the importance of systematically monitoring trends in banking. In this regard, our structured process aims to help banks to navigate uncertainty and to support them in defining future-proof business models.

A structured process to identify, categorize, and monitor trends

Trend research is challenging since there is typically a plethora of trends and innovations to be monitored. Therefore, keeping track of the market and identifying those trends that are likely to have the highest impact on banking are complex tasks. By developing a systematic process to detect trends, recognize patterns, and evaluate them, we can monitor the development of banking trends.

This process can be divided into three steps. In the first step, we create a collection of relevant trends by screening a large  amount of data from a specific trend tool. Additionally,  selected group of internal experts contributes trends manually. In the second step, a broader group of experts assesses these trends via a survey. The assessment dimensions include the strength of the influence of each trend in the future, time until mainstream adoption, and the competencies that already exist to meet this trend. In the third step, we generate a trend radar based on these results, which allocates each trend into one of three categories: watch, prepare, or act. 

Edition #1: The Client Perspective

Changing customer needs are one of the key drivers for change in banking, so our first trend radar article focuses on the client perspective.

Banks increasingly face new client behaviors and expectations, shaped by factors such as changing social values and expectations. Furthermore, higher affinity with digital and technological aspects shapes consumer preferences for everyday banking activities. New standards are emerging for financial services companies since customer centricity is a major competitive differentiator. Banks should therefore ensure that they provide the best seamless experience to their customers.

Edition 1: The „Clients“ Dimension

What's next?

To establish a systematic process suitable for the European banking sector, we assigned the large number of trends to six main dimensions, which reflect the key drivers for change in the banking market. In our first edition, we focus on the client perspective. We will take a closer look at the other five dimensions of the banking trend radar in upcoming editions:

  • Company organization
  • Economics and financial markets
  • Environmental, social, and governance
  • Regulatory and political
  • Technology


Have we aroused your interest? Then please do not hesitate to contact us. The Deloitte European Banking Trend Radar can also help you analyze the extent to which individual trends or macro-trends could impact the specific business model at your bank or financial services provider. We would be happy to work with you in conducting analyses on your organization.