With disruptive innovations across the financial sector, new entrants and multiple options for customers, many might think that traditional banking has a bleak future.

But this is not true as all that needs to change is how banks respond to developments that usher in new eras.

For example, the current Covid-19 crisis provides an ample environment for lenders to introspect and reprioritise their goals.

Besides, trends that were already in motion ahead of the ongoing pandemic have been accelerated by the coronavirus fallout.

The crisis has validated the need for robust digital capabilities as clients want to manage their banking activities from home in a bid to avoid infection.

This increased demand for digital banking services has helped identify the gaps and weaknesses that lenders need to address to meet these demands.

Technology is changing everything as a potent enabler of increased service delivery at reduced costs and so, innovation is imperative. Demographics are also changing the way banks operate, especially with the growth of the middle class.

Social behaviour and customer expectations are changing, with significant focus on customer experience and trust with data confidentiality being paramount to build this trust.

Retail banks are critically important because they facilitate the supply of money.

Around the world, there is a renewed interest in retail banking activities related to products and services catering to individuals and small businesses.

These now account for larger shares of commercial bank balance sheets. In the "return to retail" focus, banks are focusing on broadening services for retail customers.

In Bangladesh, while all lenders might not have a dedicated retail/consumer banking division or a retail/consumer banking head, they are opening retail or individual banking accounts.

Be it current, savings, term deposit, NFCD or RFCD accounts, credit or debit cards, auto or mortgage loans, or remittance services, they are delivering banking services to individuals.

Most of the banks historically may be focused on corporate or commercial clients, but they are increasingly entering the retail banking space to draw a balance between their institutional and retail deposits, loans and more importantly, bring down the cost of deposits as well as increase the yield on assets.

Any North American or European banks will agree that more money is made from retail banking than commercial or corporate banking.

If nothing else, risk adjusted returns are much higher in retail banking. With increasing investment in 'wealth management' or 'privileged banking', banks are going to make more money from retail offerings to wealthy citizens than synthetic product driven investment banking.

Retail banking solutions need to quickly respond to change in consumer demand and new trends. So, what is the "evolution or revolution" needed in retail banking?

PwC recently did a study on how global mega-trends will impact the future of retail banking using its proprietary Project Blue framework.

They studied six priorities for retail banks today to help ensure their future success.

First, developing a customer-centric business model where you invest in improving overall customer experience and transformation of the operating model.

Second, optimising distribution offerings at anytime, anywhere, fully utilising all banking channels in an integrated fashion.

Third, simplifying business and operating models. This requires a shift in how retail banks think about their operations, such as product simplification; integrated distribution; shared service infrastructure; risk management at a customer level; streamlined compliance processes.

Fourth, obtaining an information advantage. Leading banks gather structured and unstructured information from sources such as credit scores and cross-channel bank customer interaction data, etc. Leading players develop advanced analytics capabilities to integrate this vast library of data, analyse it, and create actionable insights.

Fifth, enabling innovation, and the capabilities required to foster it. Innovation will be the single most important factor driving sustainable top and bottom-line growth in banking over the years.

Sixth, proactively managing risk, regulations and capital with rules being more complex and regulators being less flexible. Leading banks need to take an approach that is pragmatic, proactive and increasingly integrated into 'business as usual'.

Every bank needs to develop a view of the future landscape and the uncertainties surrounding it. Every bank needs a clear view of its own unique strengths and challenges and develops their posture against this evolving and uncertain future. Every bank also needs a clear strategy.

There are 61 scheduled banks in Bangladesh. None of which should forget that its clients now have 60 other options and the one that is able to serve its clients, or their emerging needs, will get a bigger share of business.

Banks need to continuously invest in their people and products and more importantly, on processing and delivery platforms.

Few banks are shifting to branchless banking, prioritising digital products and platforms. They can serve clients without visiting branches.

Now more than ever before, customers are leaning towards alternative service delivery channels and the 34 per cent growth in average daily transactions through internet banking channels during the first 6 months of 2020 serves as a proof of that.

Moreover, the rise of fintech in the global financial service industry highlights the need for retail banking to redefine their product and service offerings by leveraging modern technologies like artificial intelligence, blockchain, and big data analytics or risk falling behind the curve.

Therefore, it is high time, our banks realise the need of the future: a more globalised and technology driven world.

The writer is a partner at PwC Bangladesh. The views expressed in this article are his own.