In 2015, financial services as a whole captured just 29 percent of the US$405.3 billion Digital Value at Stake (VAS) for retail banking.
A new Cisco study identifies slowing growth, innovation and cybersecurity weakness as the reasons preventing retail banks from adopting digital technologies and business models.
Retail banks can tap Digital Value at Stake with the right technology investments and a plan for navigating security risks.
A combination of analytics, mobility, video, and virtualised delivery models can create a blueprint for capturing a share of this lucrative opportunity.
"The ability for digital technologies to create and drive new revenue opportunities, combined with the ability to lower operational costs through digitised business processes, brings tremendous opportunity," said Jason Bettinger, director of Financial Services for Cisco's Business Transformation Group.
Cisco's roadmap to Digital Value stipulates retail banks to accelerate digitisation or risk extinction.
This is critical as by not digitising more fully, incumbent retail banks missed out on US$144 billion globally from 2011 to 2015.
A 2015 study indicates that 4 out of the top 10 retail banks will be displaced by digital disruption in the next three years.
Despite this threat, only 27 percent are taking a proactive approach by disrupting their own businesses.
"By assessing, adopting and combining the right digital use cases for their needs, and doing it securely, retail banks will capture their share of the Value at Stake and be in a position to operate more agilely and compete," added Bettinger. "By innovating and driving relevant new products and experiences to the market quickly, they can be the new disruptors."
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