With the financial services industry in a constant state of change, identifying where to put the most time and effort can be challenging for an organization of any size. Getting the balance right between being ahead of the curve to be an early adopter, and not wasting energy on trends which are short lived or amount to nothing can be difficult.
We can be sure however that to remain relevant as the industry continues to evolve, there is a need to be responsive and adaptive to some key trends within the market. Here are three areas of focus which I see are delivering tangible results to organizations in Poland (where I am based) and across Europe right now.
1. Through the eyes of the consumer. The need to be focused on the customer is of course nothing new, but what has changed is how much attention this area should be given. There is a shift from including customer wants and needs into the overall business strategy, to the customer now being the driving force behind all directions and decisions.
Customer expectations continue to rise and the tolerance for poor service is diminishing rapidly. With loyalty closely linked to customer satisfaction, 82% of Polish consumers said that customer experience is equally as important as the actual product or service. This just demonstrates that it’s not simply what services you are offering, but how you are offering them.
2. Simplifying operations. As part of the drive to becoming more customer centric, we are also seeing organizations re-evaluating how they operate and their core strategic focuses. Coupled with the need to reduce costs and deliver efficiencies, many financial service organizations are re-aligning operational models to become more agile and adaptable for the future.
In Poland there has been a clear shift to outsourcing of non-core business areas, essentially allowing financial service providers to focus on delivering customer value and revenue generating activities. With an openness to innovation and embracing digitization, it is not surprising that Poland has advanced quickly with this trend, recognizing the benefits of creating a more flexible and robust infrastructure for the future, to remain relevant against fierce competition.
Across Europe we are seeing operational resilience being bolstered in other ways as many financial institutions embrace a ‘shared banking’ approach. In some countries such as The Netherlands and Belgium financial service providers are joining forces to maintain effective services for consumers through self-service solutions. Other countries such as the UK are offering banking hubs, which provide access to shared banking services where a branch is not available.
3. Managing cash differently. We all recognize the important role cash still plays in the lives of many people across Europe and therefore maintaining the choice to use cash remains vital. Where we are seeing changes is in how cash is handled to ensure that the industry can continue to offer consumers cash as a payment option in a financially viable way.
For example, shifting ATMs from simple cash-out systems to those where consumers can deposit cash is a trend that continues to accelerate. In Poland such automated deposit ATMs have increased by 6% and an 8% global increase in automated deposit terminals is predicted by end-2026 (from end-2021), giving consumers greater flexibility whilst also providing cost savings for the provider.
Another example of managing cash costs in a smarter way is again through collaboration. In the same way we are seeing banks combine forces to continue to deliver services to consumers, shared solutions for managing cash can be seen in some parts of Europe. In Italy cash-counting is carried out in shared hubs to minimize costs and Sweden’s utility model approach provides natural cost savings across a combined network of providers.
Led by consumer demands, increased competition and a changing regulatory landscape, the financial services sector will continue its path of evolution as we look to the future of banking. The ability to be flexible and tailor services and solutions to the key driving forces within the industry will be what locks in competitive differentiation and customer satisfaction for this year and beyond.
 State of the Connected Customer Report, Salesforce, 2021
 RBR 2022, Global ATM Market and Forecasts to 2027
 RBR 2022, Deposit Automation and Recycling
Originally posted in Finextra