Just as the banking industry recovered from the impact of the pandemic, more than twothirds of economists at 23 major financial institutions stated a belief that the U.S. economy will experience a downturn in 2023. This economic uncertainty has put an increasingly bright spotlight on the ability for traditional financial institutions to rethink existing business models from the inside out, to support an increasingly digital consumer. From delivering new digital solutions at speed and scale, to personalizing experiences with predictive engagement, banking leaders must make significant paradigm shifts. The digitization of banking has also triggered a new wave of competition between traditional and nontraditional financial service providers. The pressure is on to quickly become ‘digitalfirst’ organizations from the top down.
Retail Banking Trends and Priorities 2023 RETAIL THE FUTURE BANKING OF DIGITAL TRENDSLENDING AND PRIORITIES 2023 January 2023 © 2021 2023 Digital Banking Report All rights reserved PAGE RETAIL BANKING TRENDS AND PRIORITIES 2023 As financial institutions deal with economic uncertainties, they will increasingly need to use data and analytics to anticipate customer needs, creating engagement opportunities that will improve financial well-being and optimize revenue potential — Jim Marous Owner and CEO Digital Banking Report Copyright 2023: DIGITAL BANKING REPORT (ISSN 2375-3455) is published by DBR Media LLC, 8803 Brecksville Rd., STE 7-223, Brecksville, OH 44141, USA Phone: +1 (216) 218-4257 admin@digitalbankingreport.com Issue 299 Publisher: Jim Marous, jmarous@digitalbankingreport.com Creative Director: Carol Ann Ryan WARNING: Federal copyright law prohibits copying or distributing this report in part or in its entirety (© 2023) Contact: jmarous@digitalbankingreport.com for permission © 2023 Digital Banking Report All rights reserved PAGE RETAIL BANKING TRENDS AND PRIORITIES 2023 Contents Letter from Jim Marous | | Executive Summary | 10 | Moving from Customer Experience to Customer Engagement | 19 | Building a Data and Analytics Foundation | 27 | Continued Transition from Physical to Digital | 33 | Collaboration for Innovation at Speed and Scale | 38 | Leadership, People and Culture | 45 | Final Thoughts: An Interview with ChatGPT | 51 | About the Research | 56 | About the Author | 59 | © 2023 Digital Banking Report All rights reserved PAGE RETAIL BANKING TRENDS AND PRIORITIES 2023 Letter from the Author Just as the banking industry recovered from the impact of the pandemic, more than two-thirds of economists at 23 major financial institutions stated a belief that the U.S economy will experience a downturn in 2023 DIGITAL BANKING REPORT Jim Marous, Owner & CEO jmarous@digitalbankingreport.com 8803 Brecksville Rd., STE 7-223, Brecksville, OH 44141 (216) 218-4257 This economic uncertainty has put an increasingly bright spotlight on the ability for traditional financial institutions to rethink existing business models from the inside out, to support an increasingly digital consumer From delivering new digital solutions at speed and scale, to personalizing experiences with predictive engagement, banking leaders must make significant paradigm shifts Issue 299 Jim Marous The digitization of banking has also triggered a new wave of competition between traditional and non-traditional financial service providers The pressure is on to quickly become ‘digital-first’ organizations from the top down In 2023, the lack of venture funding will result in many fintech firms collaborating with (or being purchased by) incumbent banks, greatly improving the speed of innovation Some of this innovation will enable smaller banks and credit unions to serve narrow segments or increase market share with banking-as-a-service (BaaS), embedded banking, or open banking solutions Collaboration with third-party providers will also assist financial institutions as they try to cut costs and increase efficiencies to become more future-ready After years of talking about the potential of using artificial intelligence to improve customer experiences, 2023 will see AI helping financial services firms automate processes, increase efficiency, reduce costs, and improve predictive customer engagement There will also be enhancement of current uses in fraud and risk detection, regulatory compliance, and account opening and loan decisioning processes In the past, the banking industry has taken a defensive posture when preparing for an economic downturn, including a decrease in back-office upgrades, reduced spending on new technologies, a lower emphasis on innovation, and layoffs © 2023 Digital Banking Report All rights reserved PAGE RETAIL BANKING TRENDS AND PRIORITIES 2023 Letter from the Author (continued) While some of these strategies may still make sense for some institutions, the banks and credit unions that combine these defensive tactics with offensive digital banking transformation investments in customer experience, innovation, human skill upgrades, and modern technologies can create substantial differentiation The 2023 Retail Banking Trends and Priorities report is sponsored by Q2 The insights are the result of a comprehensive global research initiative that included more than 600 financial services executives from small and large organizations It is hoped that the learnings from this report will become instrumental in building more futureready financial institutions that will create better experiences for both customers and employees Jim Marous Owner and CEO Digital Banking Report © 2023 Digital Banking Report All rights reserved PAGE RETAIL BANKING TRENDS AND PRIORITIES 2023 Navigating Uncertain Times Article by: Kirk Coleman Chief Banking Officer, Q2 Banks and credit unions are faced with many challenges triggered by the looming threat of recession along with geopolitical conflict and uncertainty To navigate these uncharted waters, it is critical for executives and board members to focus on a few key priorities to help their financial institutions thrive during economic uncertainty and emerge from this turbulent period stronger and more resilient Align on Clear Strategies Banks and credit unions are grappling with the paradox of choice as they evaluate the huge number of options available to them today while also deciding which businesses to reduce or exit Being crystal clear on your strategies will enable your institution to make measured decisions that will impact the future success of your business, especially with limited resources and shifting investment priorities It’s in the banker’s nature to want to be helpful to everyone in the community they serve, but that also means they’re trying to fulfill a very diverse mix of needs (small businesses, medium businesses, individuals, wealthy individuals, etc.) That was once the foundation of a community bank, but now it’s a much more competitive marketplace Executive teams need to lean in on what they know best, decide where they have significant competitive gaps, and be determined to invest for the long term by hiring the right people, reallocating talent from less important businesses, and reshaping their balance sheet to make room for the healthiest growth possible © 2023 Digital Banking Report All rights reserved PAGE RETAIL BANKING TRENDS AND PRIORITIES 2023 It’s also important to be clear with your organization about what you are, and are not, going to focus on and what is expected Most of the time executive teams make smart decisions about where to drive growth but the results are watered down because of strategic drift or because floundering businesses are allowed to slide sideways for far too long This wastes valuable time and resources and undermines the most important objectives Innovate and Simplify Financial institutions seem to love complexity When new ideas or processes are introduced, many teams are reluctant to completely eliminate the old Maybe there’s one team of bankers who insist that they need their own special procedures or a small number of customers dictates an ongoing investment in a frail and unsupported technology Most commonly, innovation is piled on top of existing technical or process debt and it becomes difficult to realize all of the promised efficiencies and gains Pairing the goals of innovative progress and simplification of ongoing operations will help financial institutions become healthier and set a pattern for internal teams to follow when thinking about new ideas and projects Every CEO should ask their teams, “How will this idea also help simplify our business?” This is hard to get right all of the time but getting better at this has a big pay-off When it comes to digital transformation and driving client engagement, delivering unique and personalized experiences means listening carefully to what customers need, balancing steady and incremental improvement versus bigger, and maybe less frequent, innovative leaps, and helping teams through the natural reluctance to try new things Keep in mind the smart investments you make in innovation should also pay dividends in simplifying your business and operations Invest In Your Talent The success of a financial institution still mostly hinges on people In addition to experienced banking talent, leaders must seek non-traditional or often overlooked skill sets Successful talent strategies have an out-sized impact on future performance and strategic options, and having the right talent is crucial to thriving Until recently, it was challenging for a financial institution to compete for talent who prefers to work for a hot startup or major tech brand But with the recent trend of layoffs by large and small technology companies, the market is now teeming with brilliant individuals that can help you turn your innovative ideas into reality, while enabling you to anticipate future business needs Leverage your purpose or mission to attract new talent that may not have previously considered working for a bank or credit union When they join the team, you can pair them with a veteran to help them learn the industry and find ways to make new and unique contributions Instead of having very narrow experience or expertise requirements, be open to considering candidates with great skills in an adjacent industry And be clear with your existing teams about why you are doing this Infusing new talent and perspectives can have a healthy and transformative impact on the organization Traversing through uncertain times can be a challenge for bank executives and board members At the same time, it can also present unique opportunities for financial institutions that have clear, long-term growth strategies and continue to invest in innovation while building their talent capacity As seen throughout history, turbulent times have been the catalyst for positive change © 2023 Digital Banking Report All rights reserved PAGE RETAIL BANKING TRENDS AND PRIORITIES 2023 FREE DOWNLOADS Effective January 1, 2023, all 290+ reports from the Digital Banking Report library are available for free download by completing registration u Timely Insights u Exceptional Value u Digital Access u Nearly 300 Reports u Over 6,000 Charts u Published by Jim Marous UPCOMING ISSUES ■ Innovation in Retail Banking ■ Future of Financial Marketing Visit our website today! banking transformed white paper NOVEMBER 2022 STATE OF BUSINESS PROCESS AUTOMATION IN BANKING by: Jim Marous The banking industry’s leading source for research with actionable insights © 2023 Digital Banking Report All rights reserved © 2023 Digital Banking Report All rights reserved Customer Lifecycle Information Management © 2022 Banking Transformed White Paper All rights reserved PAGE PAGE RETAIL BANKING TRENDS AND PRIORITIES 2023 © 2023 Digital Banking Report All rights reserved PAGE Executive Summary PAGE 10 RETAIL BANKING TRENDS AND PRIORITIES 2023 Leadership, People and Culture © 2023 Digital Banking Report All rights reserved PAGE 45 RETAIL BANKING TRENDS AND PRIORITIES 2023 Leadership, People and Culture Most financial institutions have moved with unprecedented speed, teamwork, focus and empowerment to build digital banking solutions since the pandemic The question becomes, will institutions maintain this level of agility, commitment and innovative thinking moving forward at a time of economic uncertainty? Some say recession is coming Others say it’s already here, while still others don’t believe the economy will suffer much in the near-term No matter what the future brings, financial institutions need to develop a strategy that can recession-proof and future-proof their current business models If the economy takes a deeper dive, inaction by leadership of financial institutions will make it harder to catch up and will put organizations further behind the curve as to where the industry is going It will also make it hard to keep pace with the changes impacting the industry today and going forward The banking industry has a once-in-a-generation opportunity to transform legacy business models to become more competitive and more resilient during economic upheaval By integrating data, analytics, advanced technologies, automation and an up-skilled workforce, banks and credit unions can become more future-ready and agile in a crisis The question becomes, will leadership of banks and credit unions embrace change, take risks, and take advantage of this opportunity? © 2023 Digital Banking Report All rights reserved PAGE 46 RETAIL BANKING TRENDS AND PRIORITIES 2023 The Pandemic Woke Banking Up When the pandemic disrupted the world as we knew it, financial institutions had to rethink the way work was conducted, how products and services were built and delivered, how consumers were communicated to, and the vision for the future The industry had to react to unexpected opportunities and challenges in an instant, sometimes opting for less than perfect outcomes Over the past 2+ years, product and service gaps rose to the surface Outdated processes and procedures hampered the ability to deliver what consumers desired The pandemic highlighted where financial institutions were falling short of expectations While some (few) organizations were well prepared, others were forced to change course in a more piecemeal manner As we enter 2023, incremental changes to last year’s strategic plan will be insufficient Organizations need to make assumptions around the state of the banking ecosystem, identify gaps that require immediate attention, and re-set priorities and investments appropriately Digital banking transformation is no longer optional … it is a matter of survival Importance of Strong Leadership There is significant economic uncertainty in the marketplace It is during times like these that strong leadership is required It is one thing to lead during a crisis It is entirely different to maintain speed and agility as part of an ongoing strategic mission How organizations keep the momentum going that was achieved during the pandemic? How does a bank or credit union reflect on the gaps that were amplified when the world came to a screeching halt? But don’t simply limit the view to what has taken place over the past two years Put all that was learned in the context of what your organization was already working towards before the pandemic and since, and where you believe the industry will be five years from now For instance, it is one thing to be able to allow consumers to open a new account or apply for a loan digitally It is entirely another to make the process as fast and simple © 2023 Digital Banking Report All rights reserved PAGE 47 RETAIL BANKING TRENDS AND PRIORITIES 2023 Organizations must redefine what it means to be a ‘digital bank’ and what is required to be ‘customer-centric’ Leaders must share the vision they have for employees, customers, their strategic partners, and investors despite not knowing for sure what the future may bring as the strongest competitors in the marketplace Leaders must set the vision for the future, while clearing out the obstacles that prevented digital transformation in the past What stands in the way of changing the legacy processes, upgrading outdated infrastructure, or upskilling current employees to move beyond status quo? According to BCG, “It’s important to appeal to people’s deepest motivations in a positive way — to establish the aspiration for new possibilities that the organization can achieve, rooted in a broader purpose — and to galvanize people around that aspiration.” Moving Beyond Comfort Zones Leaders of most financial institutions have continued to deliver positive financial results, even during the trying times of the past couple years But that is not enough to future-proof an organization going forward Leaders at all levels of a financial institution must move out of their collective comfort zones to embrace the change that is needed in the future Leaders must articulate the new vision at the beginning of the strategic planning process, motivating and delegating to others within the organization, eliminating fear and confusion around the massive changes to business as usual The good news is that, while change can be painful, leading change is easiest when change is already occurring With everyday life at home and work completely disrupted in 2020, and still being in a state of constant flux, collaboration and productivity increased as people instinctively pulled together COVID-19 also provided the opportunity to take advantage of the massive shift in digitization to advance digital banking transformation significantly more than would have been possible without the pandemic What leaders must be cautious of is the potential aftermath of the crisis mode — when the adrenaline and energy of making massive changes wears off Without continuous engagement and communication of purpose, fatigue and stress can take over Leaders must shift the mindset to the future state of the business to re-energize the organization As stated in an article from YSC Consulting, “Leaders need to have © 2023 Digital Banking Report All rights reserved PAGE 48 RETAIL BANKING TRENDS AND PRIORITIES 2023 This time of economic uncertainty and industry disruption is an excellent time to reset the mission, purpose, and value proposition of an organization From the markets that will be served, to the way the institution will engage with employees, consumers, and businesses, this is the time to determine what an organization will be known for going forward the confidence to lay out a hypothesis [for the future] with the humility to expect that some of the predictions will be wrong.” Don’t Wait for a ‘New Normal’ More than at any time in the past, there is a need to act decisively in developing a transformation agenda The strategic planning process for 2023 allowed leadership teams to articulate a vision and specific plan that is far different than a modest adjustment to last year’s plan In fact, many organizations are moving away from an annual strategic plan to a much more frequent planning process Organizations must redefine what it means to be a ‘digital bank’ and what is required to be ‘customer-centric’ Leaders must share the vision they have for employees, customers, their strategic partners, and investors despite not knowing for sure what the future may bring The pandemic made it clear that there is no such thing as a ‘new normal’ in the context that there is no specific endpoint to the environmental changes occurring Instead, strategic planning should be done understanding that the world and strategic plan is iterative, with adjustments made accordingly The challenge in the 2023 is that there is no guidebook for success, since so much is still unknown In addition, last year’s successes, organizational structure, investment priorities and marketplace assumptions represent the realities of the past In other words, most organizations need to start from scratch based on what has happened over the past years Most importantly, being a fast follower is no longer a valid strategy since each institution is vastly different and because change is happening faster than ever There is no reason to throw out all that was learned in the past, but it is not wise to hold on to past assumptions that may no longer be valid Redefining Organizational Culture The past two years served as a wake-up call to organizations steeped in legacy culture It is clearer than ever that the banking business models of the past are both outdated and dangerous to hang on to Every demographic group has changed the way they banking and what they expect from their financial institution From digital capabilities without the need for a branch, to hyper-personalization that uses data to recommend appropriate solutions, the business of banking has been altered forever Many organizations have seen positive behavioral and cultural changes emerge in response to the crisis The pandemic also revealed some less favorable changes As leaders are building their strategic, they must redefine the culture that they want going forward, reassessing individuals and teams against these transformed expectations In other words, this time of economic uncertainty and industry disruption is an excellent time to reset the mission, purpose, and value proposition of an organization From the markets that will be served, to the way the institution will engage with employees, consumers, and businesses, this is the time to determine what an organization will be known for going forward But this vision will not be static Instead, it should evolve and be responsive to the marketplace © 2023 Digital Banking Report All rights reserved PAGE 49 RETAIL BANKING TRENDS AND PRIORITIES 2023 Don’t Forget Your Employees As mentioned, the time since the pandemic disrupted the way people in all organizations worked as well as the responsibilities that many employees had prior to COVID This was disruptive to both individuals and teams To be successful in the future, banks and credit unions must not ignore the opportunity (and risks) for new ways of working, new skills required and new motivational models emerging Organizations that only focus on the external consumer without paying attention to the needs of the workforce will fail in transformation efforts and the ability to leverage the most important component of success Companies will need to focus on training and upskilling to provide future opportunities while eliminating fear of being displaced Creating people-focused initiatives that support the physical and mental well-being of the workforce will not only help the organization and its employees, but also be reflected in customer satisfaction © 2023 Digital Banking Report All rights reserved PAGE 50 RETAIL BANKING TRENDS AND PRIORITIES 2023 Final Thoughts: An Interview with ChatGPT © 2023 Digital Banking Report All rights reserved PAGE 51 RETAIL BANKING TRENDS AND PRIORITIES 2023 Final Thoughts: An Interview with ChatGPT In an exclusive interview with AI-powered ChatGPT, the new large language model developed by OpenAl, we discuss the development of this chatbot solution, the ways banks can benefit from conversational AI, and the trends and opportunities in banking for 2023 and beyond One of the most talked about advances in the deployment of AI occurred on November 30, 2022, when OpenAI released ChatGPT, deemed “the most advanced, user-friendly chatbot to enter the public domain.” ChatGPT can create high-level content, respond to inquiries, assist with research, and provide perspectives on current trends Rather than creating a typical summary of this year’s trends and priorities, interviewed ChatGPT about itself, how it could assist the banking industry and thoughts on the future of banking The AI chatbot gave detailed, human-like answers to each question, generated in a matter of seconds The set-up for the interview: “You are the latest of the large language chat models I am a content creator wanting to learn more about you and your capability to help the banking industry I’d like to interview you for a research report we are creating on the future of banking You should respond in a conversational manner.” (Note: The following responses are from ChatGPT and were not edited.) What is the advantage of ChatGPT compared to traditional chatbots? ChatGPT chatbot: ChatGPT is a large, advanced language processing model that is trained using a technique called generative pre-trained transformer, or GPT This © 2023 Digital Banking Report All rights reserved PAGE 52 RETAIL BANKING TRENDS AND PRIORITIES 2023 allows ChatGPT to generate human-like responses to questions and statements in a conversation, making it a powerful tool for a wide range of applications Compared to traditional chatbots, which are often limited in their ability to understand and generate natural language, ChatGPT has the advantage of being able to provide more accurate and detailed responses Additionally, because it is trained using a large amount of data, ChatGPT is able to learn and adapt to different conversational styles and contexts, making it more versatile and capable of handling a wider range of scenarios What weaknesses does ChatGPT have right now? ChatGPT chatbot: As with any technology, ChatGPT has certain limitations and weaknesses that will be improved upon in future iterations of the technology One potential weakness of ChatGPT is that it is a large, complex system that requires significant computational resources to run, which can make it difficult or expensive to use in some cases Additionally, because it is a machine learning system, my solution is only as good as the data it is trained on, which means that it can sometimes generate responses that are inaccurate or misleading if the training data is of poor quality Finally, ChatGPT is not yet capable of understanding the full range of human language and meaning, which means that it may not always be able to provide a complete or accurate response to certain questions or statements However, as the technology continues to advance and improve, it is likely that these weaknesses will be addressed and overcome in future iterations of ChatGPT How can the banking industry best use ChatGPT technology? ChatGPT chatbot: The banking industry can use ChatGPT technology in several ways to improve their operations and provide better service to their customers For example, ChatGPT can be used to automate customer service tasks, such as answering frequently asked questions or providing detailed information about products and services This can free up customer service representatives to focus on more complex or high-value tasks, improving overall efficiency and customer satisfaction Additionally, ChatGPT can be used to generate insights and analysis from large amounts of data, allowing banks to gain valuable insights quickly and easily into their operations and make better-informed decisions In the future, ChatGPT technology is likely to become even more powerful and versatile, allowing banks to use it for a wider range of tasks and applications Can ChatGPT improve innovation? ChatGPT chatbot: Yes ChatGPT can be used to generate new ideas and concepts by analyzing large amounts of data and identifying trends and patterns They can also be used to evaluate the potential feasibility and viability of new ideas, and to help refine and develop those ideas into more concrete plans and proposals © 2023 Digital Banking Report All rights reserved PAGE 53 RETAIL BANKING TRENDS AND PRIORITIES 2023 I can also be used to assist with the creative process by providing inspiration and suggestions for new directions and approaches Overall, the use of large language models can help stimulate and support the innovation process by providing a source of new ideas and insights What is your perspective on the future of banking? ChatGPT chatbot: The future of retail banking is likely to involve a combination of traditional brick-and-mortar branches and increasingly sophisticated online and mobile banking services Banks will continue to offer a range of financial products and services, including checking and savings accounts, loans, and investment options However, the focus will shift towards providing personalized and convenient experiences for customers through the use of advanced technologies such as artificial intelligence, machine learning, and data analytics Banks will need to adapt to changing consumer preferences and the rise of alternative financial services providers, such as fintech startups and digital-only banks This may involve partnering with or acquiring these companies to offer innovative products and services to customers There may also be a greater emphasis on financial education and financial wellness, as well as the integration of new technologies such as artificial intelligence and blockchain Finally, there will be an increasing importance of sustainability and environmental concerns that may lead to a greater focus on sustainable finance and socially responsible investment options Overall, the future of retail banking is likely to be marked by greater competition, innovation, and customer-centricity What are the biggest challenges in banking? ChatGPT chatbot: The biggest challenges in retail banking today include: The rise of fintech companies: Fintech companies, which use technology to offer financial services, are increasingly competing with traditional banks for customers This has put pressure on banks to innovate and improve the customer experience in order to remain competitive Regulation and compliance: Retail banks must navigate a complex regulatory environment to operate, which can be a significant challenge This includes complying with laws and regulations designed to protect consumers and ensure the stability of the financial system Cybersecurity: As more financial transactions are conducted online, the risk of cyber attacks and data breaches has increased This has made it necessary for banks to invest in robust cybersecurity measures to protect their customers and their own operations Managing costs: Retail banks face pressure to keep costs down to remain profitable This can be challenging, especially in an environment of low interest rates and increasing competition Meeting customer expectations: Customers today have higher expectations for the services and products offered by banks This includes expectations for fast, convenient, and personalized services, as well as a seamless digital experience Meeting these expectations can be a challenge for banks © 2023 Digital Banking Report All rights reserved PAGE 54 RETAIL BANKING TRENDS AND PRIORITIES 2023 What are the biggest opportunities in banking? ChatGPT chatbot: The biggest opportunities in retail banking include: Digital transformation: The increasing use of technology in the financial industry presents an opportunity for banks to improve the customer experience and increase efficiency through digital transformation This includes the adoption of mobile and online banking services, as well as the use of artificial intelligence and other technologies to automate routine tasks and provide personalized experiences Expanding into new markets: As the global economy continues to grow and evolve, there may be opportunities for retail banks to expand into new markets, both domestically and internationally This could include offering new products and services or entering into partnerships with other companies to reach new customers Innovation: The retail banking industry is ripe for innovation, as customers are increasingly seeking new and improved financial products and services Banks that are able to successfully innovate and offer unique and valuable solutions may be able to gain a competitive advantage Meeting the needs of underbanked populations: There are still many individuals and communities around the world that not have access to basic financial services, such as banking accounts and loans Retail banks have an opportunity to address this need by providing products and services that meet the unique needs of these populations Partnerships and collaborations: The retail banking industry is becoming increasingly interconnected, with banks partnering and collaborating with other companies in the financial industry and beyond These partnerships and collaborations can provide opportunities for banks to access new technologies, enter new markets, and offer more comprehensive solutions to customers Will solutions like ChatGPT replace humans? ChatGPT chatbot: It is unlikely that solutions like me will completely replace humans While ChatGPT and other large language models can perform many tasks that are typically associated with humans, such as answering questions and generating text, we are not capable of replacing human creativity, intuition, and empathy ChatGPT and other large language models are also not able to learn and adapt to new situations in the same way that humans can Instead of replacing humans, ChatGPT and other large language models are more likely to augment human abilities and help us to perform tasks more efficiently PAGE 55 RETAIL BANKING TRENDS AND PRIORITIES 2023 About the Research © 2023 Digital Banking Report All rights reserved PAGE 56 RETAIL BANKING TRENDS AND PRIORITIES 2023 About the Research The analysis in this report is based on a December 2022 Digital Banking Report survey of global banks and credit unions The survey used the subscriber lists of The Financial Brand and Digital Banking Report, which includes organizations of all sizes worldwide No responses from non-financial organizations were included in the results, and only completed surveys were included The responders were self-selected after receiving a nominal incentive of raw survey results Among overall survey respondents, 33% are from large national or regional banks, 25% are from credit unions, and 30% are from community banks This distribution is distributed similar to previous reports on trends and priorities CHART 16: RESPONDENTS BY TYPE OF INSTITUTION 12% Source: Digital Banking Report © January 2023 Digital Banking Report 33% 25% ■ Large national or regional bank ■ Community bank ■ Credit union ■ Other financial services firm 30% For this research, 9% of respondents are from FIs with more than US$100 billion in assets, with 16% having US$11 billion – US$100 billion in assets, 46% representing firms with US$1 billion – US$10 billion in assets, and 29% of the respondents having less than $1B in assets The distribution by size of organization is comparable to previous research done by the Digital Banking Report CHART 17: RESPONDENTS BY ASSET SIZE (In US$) 9% Source: Digital Banking Report © January 2023 Digital Banking Report 29% 16% ■ More than $100 billion ■ $11 billion to $100 billion ■ $1 billion to $10 billion ■ Less than $1 billion 46% © 2023 Digital Banking Report All rights reserved PAGE 57 RETAIL BANKING TRENDS AND PRIORITIES 2023 Finally, the respondents who participated in our research were globally headquartered While there was an over sampling from North America (68%), 7% were from Europe, 10% were from Asia and 8% were from Africa CHART 18: LOCATION OF FINANCIAL INSTITUTION HEADQUARTERS Where is your company headquartered? North America (United states and Canada) 67% Asia 10% Africa 8% Western Europe (Other than U.K.) 3% Middle East 3% Central & South America or Caribbean 3% Eastern Europe 3% Other 1% United Kingdom 1% Australia 1% Source: Digital Banking Report Research © January 2023 Digital Banking Report © 2023 Digital Banking Report All rights reserved PAGE 58 RETAIL BANKING TRENDS AND PRIORITIES 2023 About the Author Named as one of the most influential people in banking and a ‘Top Fintech Influencer to Follow’, Jim Marous is an internationally recognized financial industry strategist, co-publisher of The Financial Brand and owner and publisher of the Digital Banking Report As a sought-after keynote speaker, author and recognized authority on disruption in the financial services industry, Jim has spoken to audiences worldwide He has been featured by CNBC, CNN, Cheddar, the Wall Street Journal, the New York Times, the Financial Times, the Economist and the American Banker Through his podcast, Banking Transformed, Marous provides listeners with an opportunity to hear about the organizational impact of digital transformation With new shows each Tuesday, Jim interviews his guests with the objective of digging deeper into the opportunities and challenges facing banking and other industries You can download Banking Transformed on The Financial Brand podcast page or on your favorite podcast platform You can also follow Jim Marous on Twitter and LinkedIn or visit his professional website © 2023 Digital Banking Report All rights reserved PAGE 59