The retail banking industry has undergone significant changes over the past few years, driven by technology advances and regulatory evolution, including the UK Open Banking rules as well as its European sibling, PSD2. These forces will continue to be significant in 2020 as retail banks ponder their future. Here are my predictions of what will matter the most in the coming year.

• Sky’s the limit for the Cloud. Banks across the globe have learned by now that cloud technology provides greater resilience and improved security than most on-premise systems. Crucially, cloud enables banks to trial innovations quicker and to greater effect, allowing them to transition towards the implementation stage faster for solutions they choose to market. In 2020, we will see a greater number of banks leveraging cloud solutions.
• We’ll see further growth in digital-only players entering the banking space. RBS’ Bó is just the latest example, but the mobile-only market will almost certainly heat up further in the coming year as incumbents respond to the rapid growth of smaller and nimbler challengers. Players from other segments such as P2P lending, are also increasingly seeking to pursue their banking ambitions. At the beginning of December, Zopa famously rescued its banking licence with hours to spare after raising the required funds from IAG Capital. What’s more, technology giants continue to push into consumer finance, with Google reportedly preparing to launch a personal checking account service in partnership with Citigroup. Not to mention Facebook’s ambitious Libra project! Against this backdrop, 2020 promises to be an exciting year.
• Look East for innovation. After years of Silicon Valley dominance, 2020 may mark a turn in the tide in terms of leading trendsetters within the retail banking space. Chinese internet giant, Tencent, has recently been granted a license by Hong Kong’s Monetary Authority (HKMA) to operate a “blockchain bank”. HKMA also announced further virtual bank licences will be issued in order to boost competition and innovation within China’s financial industry, with Ant Financial and OCBC among companies considering applications. Needless to say, Alibaba-owned Ant Financial is a true innovation powerhouseand could therefore set the tone in terms of developing innovative solutions to consumer finance globally next year.
• Balancing act between evolving identity solutions and ensuring data integrity. Most retail banks already leverage digital identity solutions, and there are a number of new exciting propositions in the pipeline which we can expect to launch next year, with Scandinavian markets the ones to watch. At the same time, with an increased emphasis on data security, we will likely see banks increasingly invest into security solutions, ensuring that storing and transferring client data is done in the safest way possible, eliminating any possibility of an integral breach. 
• The new normal of AI. It is fair to say that AI-based solutions have already reached the level of ubiquity, a trend that will further expand in 2020. Chats with AI-driven “agents” is commonplace and helps save client time by resolving basic queries. The availability of viable AI solutions will continue to increase, most likely in the space of lower-level enquiries in retail banking such as amending overdraft limit or applying for a new card. We will also likely see more hybrid solutions in the customer service domain whereby client enquiries are first handled by a bot-agent, before handing complex enquiries over to a human representative. In that way, AI and humans will increasingly supplement each other, facilitating the shift to a so-called human “super-agent”.