With the global economy recovering faster than expected and markets soaring, banks have had a good year in 2021. In 2022, leading banks will embrace a future fit technology strategy and accelerate their end-to-end digital transformation to compete and survive in an increasingly unpredictable, post-pandemic world.
In 2022, we predict that banks will:
- Spend lavishly on tech, talent, and fintech. After a big drop in 2020 and slow growth in 2021, we expect tech spending by banks to achieve double-digit growth in 2022, with the US and China taking the lead. Banks — which find themselves in stiff competition with tech companies and other sectors for top engineering talent — will also splurge on their tech workforce and move beyond agility with adaptive talent management. And as the digital surge in finance accelerates, we expect 2022 to be an(other) bumper year for investment in fintech. Eyeing the opportunity to pick up innovative offerings and plug digital gaps, banks will continue their frenzy of deal-making, investing in, or acquiring fintechs.
- Expand their lineup of sustainable finance products. The spotlight shines ever brighter on sustainability and environmental, social, and governance (ESG) principles, as empowered consumers and regulators call for sustainable transformation in the aftermath of the pandemic. In 2022, financial services firms will be keen to accelerate their speed to market for ESG products and services, such as green loans and mortgages, and checking accounts with sustainability and carbon-tracking features. A string of sustainable finance regulations and taxonomies — with Europe leading the way and other geographies following suit — will reduce greenwashing and create opportunities for genuine products, innovative providers, and ESG service providers.
- Push the boundaries of open finance. 2022 will be the year when open finance starts reshaping financial services for good and when banks wake up to both the opportunities and threats that open finance represents. With regulators in the EU and UK proposing measures to extend data sharing principles across a wider set of financial and nonfinancial products — and other countries paving the way for similar open finance initiatives — 2022 will see a growing number of banks experimenting and evolving their business models toward a more open, collaborative platform approach. While some banks will (foolishly?) try to join the race to build the world’s next lifestyle super-app, others will leverage their open-banking connectivity and focus their efforts on delivering select capabilities as a service, powering the growth of embedded finance.
Read our Predictions report to explore our five key predictions for the banking industry in 2022, discover their implications for your business, and learn how to respond.