The main challenges facing the retail banking industry in the era of digitalisation

Both the internal (micro) and external (macro) environment of banking institutions have changed significantly, redefining the competitiveness of the banking sector. The main changes observed lately, which will undoubtedly modify the view of future banks and banking, constitute: the new generation of bank customers and new client expectations, increasing competition from the FinTech, the digitalisation of the economy and the society, as well as new legal regulations - e.g. Payment Services Directive or Payment Accounts Directive. In this context, the aim of the article is to show the crucial changes in the internal and external environment of banking institutions and to identify the main challenges for banks in the near future. This paper examines the following research questions: (1) What factors and trends are the most disruptive for the modern banking industry? (2) What measures do banks have to take in order to meet both their new clients’ expectations and increasing FinTech competition? The basic research method used in the study is a review and a critical analysis of the subject literature as well as the survey method.