What will the banking world look like in 2025?

Perspectives from the "Bank and Future" Innovation Forum at the Fraunhofer Institute

Bank und Zukunft

 Financial institutions have been facing steadily increasing challenges for years: the ever-increasing mechanization of processes, the increased use of mobile devices and continuous accessibility and online availability, as well as the loss of confidence in the financial industry and the measures taken to counteract this. These are issues which are significantly affecting the banks today. For this reason, these are also the strongest factors influencing the project work for 2013/2014 in the "Bank and Future" Innovation Forum at the Fraunhofer Institute.

The Innovation Forum

The Fraunhofer Institute (FHI) is developing innovative and practical concepts and solutions for "Bank of the Future" and "Banking of the Future" in the Innovation Forum "Bank and Future”. To this end, the FHI is working on pioneering ideas about future trends, in close cooperation with leading banks and IT service providers. The aim is, on the one hand, to serve various customer segments, such as retail and corporate customers and, on the other hand, to meet the needs of different structural areas within the bank, such as management, marketing or IT. In this regard, both technological and organizational innovations as well as economic, technical and customer-oriented design aspects should be taken into consideration. As part of this holistic approach, the views of both suppliers and customers are to be included in the collaborative research process. The Innovation Forum has set itself the goal of actively supporting banks in the innovation process and in their long-term strategic aims. Ways will be presented in which financial institutions can optimize their long-term competitive position and thus generate new opportunities for profit.

S&N AG's participation in the Innovation Forum

S&N AG has been a member of the research project team since the founding of the Innovation Forum. Participation provides all participating companies with the advantage being able to both influence and respond early to future developments in the financial industry and among its clients. On the one hand, there is the possibility to introduce product innovations and product developments onto the market at an early stage. On the other hand, new concepts or solutions can also be jointly developed and implemented with other members.

Methods and Tools in the Innovation Forum

"Foresight Management" includes all the analyses that have taken place in the Innovation Forum in the 2013/2014 project phase and those that are still being carried out. This includes a process of systematically examining the future, identifying changes in the market, customer needs, new technologies and the legal framework. These are intended to lead to the identification of potential innovations and new areas of activity for the banks. They will thus be enabled to anticipate changes in good time and to plan for the medium term, in order to make decisions that achieve the best long-term results.

Hypotheses about the future are set out for different areas - from general developments, through sales management to IT. For the future course of the "Foresight management" project, the following steps were planned and thus the key factors for further action were filtered out:

  • Creation of hypotheses about the future and their evaluation by means of a survey of experts, Delphi analysis
  • Implementation of a scenario process
  • Conducting a customer survey

Trending developments in the banking world 

banking business model 2025The interim results of the innovation forum were evaluated in a scientific workshop at S&N AG. During this, it was found that the areas of customer integration, modification or expansion of the business unit and systems integration are the key points for the restructuring of banks. The following themes can be derived from this: the final customers will have a significant influence and banks will expand their present business segment, now mainly limited to a product range consisting of financial services, to bring in more product groups.

As regards banking customers, the coming years will be characterized by a deeper integration of the customer in the process. He is at the centre of the future "bank" business model. Customers will have the opportunity, though web communities and portals, to express their opinion about the bank and to rate their performance and communicate with other customers. In addition, they will also have the opportunity to make direct suggestions about modifications to banking products or the introduction of new ones. Furthermore, in the future it will be of particular importance to the customers to be offered individual products. On the other hand, they are also willing to give the bank more information about themselves.

As the scope of the business expands, the amount of data to be processed will also increase. The bank relies on applications and systems to process this data in a way that allows it to be used efficiently for its purposes. In addition, these systems should be constructed and adapted so that the processes may be presented visually to the user. This also applies to the bank data and processes of external service providers. It is therefore also necessary to ensure proper configuration and integration of banking systems. In addition, greater customer integration presupposes good accessibility of all the required systems. Software and hardware must be adapted and expanded and integrated into the IT environment of the bank. In addition, each function, in each of the individual systems, should be easy to use. The control system should be as intuitive as possible. Sub-components of the systems and applications should be made accessible at the customer's home or during a consultation with an adviser.

Another criterion is the better linkage of online channels and their accessibility, using both desk-top and mobile devices. In the future, most people will be reachable through this mobile channel and this will also increase the bank's on-line accessibility. Banking transactions will develop to the point that bank staff are not needed for the completion of basic services and these will be carried out on the Internet. For this reason, online usage and transaction rates are also used by banks as key performance indicators.

Possible business model

Geschäftsmodell BankAs a result of a long-term business relationship with a customer, it is possible to recognize the needs of the customer in advance. This means giving comprehensive advice to bank customers on everyday issues. This could for example cover financial services, the provision of a lawyer or the registration of a child in a day care centre. Since people use banking services throughout their lives, the bank must try to retain the loyalty of the customer as long as possible. The following diagram is designed to illustrate the banking services required for each stage of life. The diagram also shows, for every stage of life, the services that customers mainly ask for at that point in time. The items listed are merely examples to illustrate that the "Life Assistance Banking" model goes far beyond the services currently provided by banks. The bank's expanded business model and its integration with other markets provides the bank customer with more added value. At every phase of life, additional services are offered, which are important to him at that point in time. Thus the customer is presented with a comprehensive service for all situations. In "Life Assistance Banking", the bank manager is seen as a supporter and a personal guide. Throughout one's life, he is to be seen as someone to turn to, even in non-banking matters. In this way, solutions can be found at the bank to all the problems of daily life. The aim is to free the customer from the stresses of everyday life and to increase his comfort level. In order to promote the customer's loyalty to the bank, he is continually made offers that are tailored to his stage in life.

The bank supports the customer throughout his entire life. Since they and (where applicable) their non-banking partners have already known him for some years and have all the crucial information about him stored in the bank, a customer's needs can be detected or guided in good time. In doing this, the decisive criteria for the person to be advised must be respected: Is security preferred rather than risk-taking? Is having money readily available more important than a long-term investment? The "Life Assistance Banking" concept can also be applied, mutatis mutandis, in the business customer sector.


Banks will have changed significantly by 2025, by comparison with today's banks. A bank will no longer be only a point of contact for financial services. It will also be advising and assisting its customers on other matters. This can be "Life Assistance Banking", as well as a professional focus on a separate specific topic. In this way, the customer can be offered significant added value and a unique position as a familiar feature in the market can be achieved by the bank.

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