Five scenarios for the future of retail banking: Building strength amid transition

By drawing on the global, collective experience of PwC professionals in retail banking, we’ve developed five extreme scenarios that leaders can use to strategize how they will fit into the future retail banking ecosystem:

1. Front-end revolution: New players outside of traditional finance capture client relationships. Established banks compete as the infrastructure backbone of the financial system, acting as utility providers that offer licensed services and products but no longer have a customer-facing brand
2. Winner takes all: A wave of consolidation results in a few mega banks and fintech companies ruling the banking landscape. These massive, tech-enabled institutions generate a competitive advantage through scale.
3. Scattered landscape: Supervisory regime favours smaller and local banks, and sentiment gravitates towards nationalistic protection; clients and assets flow from global players to more locally focused banks with smaller balance sheets, deposits, and lending facilities, along with specialized micro-niche players. Fewer institutions operate across borders.
4. Resurgent regulators: Regulators take an active approach to BigTech and other non-traditional entrants to ensure a safe and strong financial system. This opens the door for banks to rebuild trust and reclaim their role as the central provider of financial products and services.
5. The rise of the central bank digital currencies: The steady decrease in the use of cash continues alongside the roll out of central banks digital currencies (CBDCs). Digital currencies gain wide acceptance in B2B, B2C, and C2C segments. Incumbent banks lose the basic bank account to central banks.