‘It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.’ – Charles Darwin

More than a hundred years after Darwin made this observation, it continues to hold true. And that is why it is so important for banks which have lived through the crisis to get on top of the changes driving the survivor’s world. While there are many propellers of change, tightening regulation, growing consumerism, measurable productivity drivers and growing unexplored potential are the most significant, each one carrying both threat and promise.

In the past couple of years, lawmakers have made the headlines regularly for their zealous attempts at plugging the regulatory loopholes which precipitated the crisis. Tight regulation is here to stay, and although it extracts a price for compliance it also forces organizations to adopt holistic risk-management practices which will stand them in good stead. Basel, the latest U.S wall street reform Act and G20 norms might actually improve profitability by directing capital deployment towards creditworthy purposes.

It is quite a challenge to manage the current crop of banking consumers, who are characterized by diversity as much as their questioning and assertive attitude. Moreover, with each bank trying to outdo the other with similar products, channels and experiences, customers have no strong loyalties. Transparency, personalization and co-creation are some of the biggest words in today’s lexicon, as banks strive to appease their clients by disclosing more information, catering to unique tastes and involving them in product development. Yet, each of these actions is an opportunity for banks to differentiate themselves and reclaim the trust of their customers.

The first half of this year saw off 90 banks in the U.S alone! This explains why conservatism in still in fashion in banking circles. In trying to improve productivity and efficiency, banks are seeking to understand what drives these most and how they may be measured and are consequently changing the way they deploy processes, resources and technology. In addition to raising productivity, these actions are empowering customers and improving experience.

The saturation of established markets and compulsions of financial inclusivity are pushing banking to the hinterland. While underserved markets present many compliance challenges, starting with the proving of identity, their immense potential cannot be ignored. Thanks to mobile connectivity, biometric security and other technology innovations, fringe markets can be served without investing large sums in physical infrastructure. Since future growth will spring from these markets, it is important to wrest first mover advantage.

Responding appropriately to these new forces, pulling in different directions, is easier said than done. Remember that in the survivor’s world it’s not only the nature of response which matters but also its alacrity. A slow reaction cedes the upper hand to competition or worse, is already outdated at the time of deployment. Besides being agile, banks need to be capable of managing huge diversity, otherwise how can they personalize their offerings or penetrate unexplored markets? Clearly, a strong culture of innovation is required to help them make this transition.