The bank of the future will cease to be about specific products and services. Instead, it will offer embedded “experiences” based on data the institution has on its customers, according to a report released by HSBC last month. Entitled “Banking of the Future: Finance in the Digital Age,” the study was developed for HSBC by Markos Zachariadis, professor and fintech chair at Alliance Manchester Business School.

“Ten years from now, day-to-day consumer banking may largely happen in the background, and without much human engagement,” Zachariadis wrote. In response to a question about whether the customer can afford a particular product, for example, the bank would not only respond with a recommendation, but it would offer other viable options based on the customer’s financial and life profile, the report noted.

In effect, banks will no longer be bound to specific product offerings such as mortgages, savings accounts and investments. Instead, banks would be meeting customers’ changing needs in real time based on a curated product roadmap dependent on their circumstances. “Requirements will be based on [customers’] dynamic needs at any one time; data will be central to this endeavor,” the report stated.

A key enabler of “hyper-personalization” in banking, explained Zachariadis, will be the emergence of digital identities, supported by financial and other personal data and unlocked by biometric technologies. Safeguarding privacy while confirming customers’ identities online will be a crucial differentiator as banks compete for market share, the study noted, referencing a recent Boston Consulting Group and Capgemini survey which stated that more than 80% of consumers trust banks with their personal data.

Meanwhile, banks will increasingly become part of a connected e-commerce system, integrating with non-financial services companies where appropriate. It offered utilities as an example where banks can immediately find the most competitive or eco-friendly options for customers based on their digital profiles.

See also: ‘Worst gimmick in history’: HSBC trumpets success of Pepper robot

The responsible use of data by banks will fuel further innovation among third-party platform providers, but the success of these efforts will be underpinned by customer trust. To retain customer buy-in on data-sharing, banks need to continue to make the case for the benefits of data sharing, the report stated. “If customers can see the value of sharing their data in a safe and transparent way, they will be far more willing to do so,” wrote Zachariadis.

As banks act as trusted brokers for third-party services, data governance will be crucial, according to HSBC. Transparency around data use is a core part of this: Customers will be more willing to share their data when they have a clear idea of how their data is being used, the study noted. “This could take the form of a future bank statement — including a summary of how one’s digital ID profile is developing and who your data has been shared with.”

Asked about the co-mingling of financial services with other industries, Jeremy Balkin, head of innovation at HSBC Bank USA, said it’s a trend that’s bound to accelerate in the coming years. “It’s not necessarily a futuristic proposition — it’s real and present now,” he said. “When every product is bought, whether it’s in store, online or on on a smartphone, it has to ultimately touch a bank at some point.”

On digital identities, banks and tech companies still haven’t yet settled on a common standard, noted Balkin, and future challenges in this area will center around bringing together the different perspectives.

“One of the reasons why we haven’t necessarily seen a a one-size-fits-all approach [to digital identity] is because perhaps the tech companies have been trying to solve [the problem] in their own ways,” said Balkin. “The bank — as the custodian of trust in the community — can have a unique role to play as the independent arbiter of identity, particularly in the digital world.”

The bank of the future will cease to be about specific products and services. Instead, it will offer embedded “experiences” based on data the institution has on its customers, according to a report released by HSBC last month. Entitled “Banking of the Future: Finance in the Digital Age,” the study was developed for HSBC by Markos Zachariadis, professor and fintech chair at Alliance Manchester Business School.

“Ten years from now, day-to-day consumer banking may largely happen in the background, and without much human engagement,” Zachariadis wrote. In response to a question about whether the customer can afford a particular product, for example, the bank would not only respond with a recommendation, but it would offer other viable options based on the customer’s financial and life profile, the report noted.

In effect, banks will no longer be bound to specific product offerings such as mortgages, savings accounts and investments. Instead, banks would be meeting customers’ changing needs in real time based on a curated product roadmap dependent on their circumstances. “Requirements will be based on [customers’] dynamic needs at any one time; data will be central to this endeavor,” the report stated.

A key enabler of “hyper-personalization” in banking, explained Zachariadis, will be the emergence of digital identities, supported by financial and other personal data and unlocked by biometric technologies. Safeguarding privacy while confirming customers’ identities online will be a crucial differentiator as banks compete for market share, the study noted, referencing a recent Boston Consulting Group and Capgemini survey which stated that more than 80% of consumers trust banks with their personal data.

Meanwhile, banks will increasingly become part of a connected e-commerce system, integrating with non-financial services companies where appropriate. It offered utilities as an example where banks can immediately find the most competitive or eco-friendly options for customers based on their digital profiles.

See also: ‘Worst gimmick in history’: HSBC trumpets success of Pepper robot

The responsible use of data by banks will fuel further innovation among third-party platform providers, but the success of these efforts will be underpinned by customer trust. To retain customer buy-in on data-sharing, banks need to continue to make the case for the benefits of data sharing, the report stated. “If customers can see the value of sharing their data in a safe and transparent way, they will be far more willing to do so,” wrote Zachariadis.

As banks act as trusted brokers for third-party services, data governance will be crucial, according to HSBC. Transparency around data use is a core part of this: Customers will be more willing to share their data when they have a clear idea of how their data is being used, the study noted. “This could take the form of a future bank statement — including a summary of how one’s digital ID profile is developing and who your data has been shared with.”

Asked about the co-mingling of financial services with other industries, Jeremy Balkin, head of innovation at HSBC Bank USA, said it’s a trend that’s bound to accelerate in the coming years. “It’s not necessarily a futuristic proposition — it’s real and present now,” he said. “When every product is bought, whether it’s in store, online or on on a smartphone, it has to ultimately touch a bank at some point.”

On digital identities, banks and tech companies still haven’t yet settled on a common standard, noted Balkin, and future challenges in this area will center around bringing together the different perspectives.

“One of the reasons why we haven’t necessarily seen a a one-size-fits-all approach [to digital identity] is because perhaps the tech companies have been trying to solve [the problem] in their own ways,” said Balkin. “The bank — as the custodian of trust in the community — can have a unique role to play as the independent arbiter of identity, particularly in the digital world.”