Retail banks should implement new digital strategies to improve customer service, else will lose the business to non-financial competitors, according to the ‘Future Factors’ report, a retail banking survey conducted by The Economist Intelligence Unit (EIU) for Temenos.

The survey, which questioned 242 senior retail banking executives globally and included 13 one-on-one interviews, found that regulation and changes in customers’ behaviour will have major impact on the industry in future.

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The industry is also expected to be affected by new competitors, with 46% of respondents citing retailers and telecommunications as biggest threat, while 22% respondents believed it could be payments providers such as PayPal.

Additionally, over 30% of banks feel that new technology will have a huge impact on retail banking.

Temenos chief marketing officer, Ben Robinson, said this EIU report confirms that the confluence of new regulation, new technology and changing customer behaviour is leading to a massive structural change in the retail banking industry.

"To respond to and capitalise on this change, especially in the face of growing competition, banks will need to make their operations much more efficient at the same time as investing in the capabilities to enhance customer service, particularly across digital channels.

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"If banks are to successfully monetise digital channels, key will be the ability to use analytical insights to tailor products to individual needs as well as leveraging transactional data to help customers make better purchasing decisions," Robinson added.