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New Accenture research attempts to quantify the level of change in the global banking industry structure. We found, for example, that 17 percent of industry players in 2017 entered the industry over the last 13 years. These newcomers have grabbed one-third of revenue growth in Europe, and in markets like the U.K., the combination of high numbers of new entrants and material revenue migration indicates a strong level of disruption already taking place. Incumbent retail and commercial banks must rethink their “North Star” business models and be bold in reorienting their business to be future-ready or run the risk of being left behind as the industry changes around them.Our research suggests two priorities for incumbent banks; priorities which are addressed in two linked points of view, each of which takes the same industry analysis as its jumping-off point. In “Beyond North Star Gazing,” we discuss how the evolution of the industry should shape medium-term business model choices and why not all business models are equally viable in each market. It makes the case that while many banks seem to be defaulting to just being a digital version of their traditional selves, the true strategic challenge is more complex and also more urgent. In the companion report, “Star Shifting: Rapid Evolution Required,” we make more of a short-term argument that banks need to take advantage of industry changes to become more relevant to their customers and sustain top-line revenue growth. The advent of Open Banking, digital engagement models and cross-industry platforms all represent threats as well as opportunities for incumbents. To thrive in the future (and earn the right to make the best medium-term strategic decisions), banks need to seize the opportunities to drive organic revenue growth and stay relevant to their customers.
