Banking’s new normal is emerging—but not where you expect

Over the past year, there has been plenty of writing about the prospect of stability—the so-called "new normal"—in post-crisis financial services markets. And during this time, we've continued to see plenty of destabilizing forces rock the industry.

Everywhere, creditors are wary of future regulatory impacts on their business and of technologies unleashing new types of competitors. And, of course, some markets are still struggling to emerge from recession, notably the US and Europe.

I’m inclined to share the view of those who say there may be no new normal coming—that is, if we're looking for it in market conditions and customer behavior. Instead of waiting for it to appear out there, banks must build it into their own operations by using analytics to increase their capacity to learn, adapt and innovate.

The real "new normal" is a way of running your business so that success no longer requires sustained stability. It's a new competitive dimension, in which the prizes go to those that excel at seizing opportunities created by the failure of their competitors to come to grips with changing market conditions.

I explore this topic further in my Insights white paper (#53), where I examine banking institutions worldwide who are taking first steps to attain this heightened level of competitiveness. I also discuss how these initial efforts highlight several key analytic directions where we see top-performers moving.