Top Commercial Banking Trends of 2022

Environmental, Social and Governance

The rapidly growing focus on Environmental, Social and Governance (ESG) that marked 2020 continued to shape events for financial institutions in the U.K. and Europe in 2021. At the COP26 conference, the International Financial Reporting Standards (IFRS) Foundation Trustees announced the creation of the International Sustainability Standards Board (ISSB). Companies and stakeholders have struggled with the myriad of sustainability standards, frameworks and metrics. The ISSB standards will provide the foundation for consistent and global ESG reporting standards that will enable companies to report on ESG factors affecting their business.

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 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.

Regulatory Compliance

With 26% of executives reporting that regulatory compliance would be one of their top priorities for 2022, we can expect to see a significant increase in digital transformation in terms of AI, automation and simplification of compliance-related processes.

At the end of 2021, the treasury and regulators came together to create the UK regulatory initiative grid for 2022. Its publication is part of the continuing approach where the regulators collaborate on their numerous initiatives, helping institutions better understand the tempo and timings of these requirements. Previously, regulators typically proceeded under their own steam, with little reference to each other’s priorities. This placed the onus of mastering new regulatory developments on the shoulders of operational, risk and compliance teams at regulated institutions. Given the near-constant stream of announcements in response to changes in the markets, the economy and technology, this coordinated approach should ease the compliance burdens on institutions in 2022.

Digital Customer Engagement

While financial institutions have done an excellent job of increasing their digital capabilities during the pandemic, research shows that consumers still desire human interaction. More evident within Europe , the local in-branch experience has been identified as a significant asset and a valued factor across stakeholders in the vertical.

In 2022 we predict that institutions will invest heavily in hyper-personalisation technology. As financial institutions have sought new ways to connect with customers, it has become obvious that the move toward personalised service is far more than a passing fad. In their report “The Future of Banking – The Hyper-Personalisation Imperative,” Deloitte states that customer experience is predicted to overtake price and product as a firm’s brand differentiator.

Data Management

Data and analytics are the fuel that powers all other components of digital banking transformation. In 2022, it is expected that the combination of data and AI will be the most important differentiator between winners and losers in the marketplace. Customers expect their financial institution to know them, understand them and reward them – in real-time – based on their daily lives and changes in their financial profile. For financial institutions, data governance is probably one of the most important constituents tending to risk management, credit decision-making, fraud detection and regulatory compliance. In 2022 we predict that institutions will be adopting the cloud to get value from data.

To learn more about the top banking trends of 2022, watch this on-demand webinar.