RESEARCH REPORT
  • Retail banks are looking to tech to accelerate growth in light of competition from fintech firms, online banks and non-financial platform companies.
  • Banking executives believe that within five years, consumers will do most of their banking through companies like Amazon, Google and PayPal.
  • Our survey shows that banks are heavily investing in blockchain now and expect to invest more in artificial intelligence in the next three years.
  • Legacy technology upgrades and skills shortages top bank executives’ concerns when it comes to digital transformation.


For banks, digital transformation isn’t just about improving efficiency or controlling costs. It’s foundational to their competitiveness. Our survey shows that 87 percent have a formal, long-term plan for digital innovation. Are they prepared for implementation, though? Fintech firms, online banks and non-financial platform companies are edging into retail banking, causing banks to focus strategically on technology solutions that can help them improve customer loyalty, boost market share and create new revenue streams.

67%

of banking executives believe consumers will do most of their saving, investing and borrowing through non-finance platform companies like Google and Amazon in five years

Banks’ technology needs evolving

Banks are working hard to address changing consumer expectations. While they’ve benefited from their investments in data analytics and cloud, our survey shows banks are evolving to adopt next-generation technologies such as artificial intelligence (AI) and blockchain. More than half of banking executives expect that in three years, AI-based technologies used to improve operations will have the biggest impact on their business—47 percent say the same about client-facing AI.

Banks have benefited from their investments in data analytics and cloud. Key enablers of next-generation tools like artificial intelligence and machine learning, these technologies have provided a foundation to evolve technology strategy. More than half think that in three years, AI-based technologies used to improve operations will have the biggest impact on their bank and 47 percent say the same about client-facing AI.

Retail bank executives expect the industry to look quite different in five years, due to investments in emerging technologies.

77%

of banking executives expect over half of customer interactions will be substantially handled by virtual assistants in five years.

77%

of banking executives believe investment banks will be using distributed ledger technologies at scale to drive competitive advantage in five years.

80%

of banking executives expect asset management firms will mainly use cloud-based technology architectures to run their back offices in five years.

To prepare for this sea change, banks are devoting significant resources to digital transformation. And they’re applying metrics consistently to monitor the value of their technology investments. Retail banks aren’t just throwing money at trendy technology. They’re carefully measuring how digital transformation is moving the bottom line.

Building the foundation for tomorrow’s platforms, overcoming obstacles

Retail banks are carefully measuring how digital transformation is moving the bottom line as they prepare for the sea change in the industry. Key to building the technological foundation will be gradually migrating away from legacy systems while strategically bringing in emerging technologies like AI. More than half of banking executives state updating their legacy technology without disrupting day-to-day business activities is a major challenge, followed by lack of collaboration with the IT function and lack of change management expertise. Forty-three percent also say a lack of qualified employees with skills to operate new technologies is a major obstacle in the financial services industry overall.

"Old processes don’t work in the new way…you might have four things that helped in the legacy environment in the past, but now a platform can transform those four things into one. That takes a lot of rigor."

– SCOTT DILLON, Chief Technology Office – Wells Fargo & Co.

Overcoming these challenges is no small feat. Banks will need to implement training programs, smart hiring strategies, and strategic digital transformation programs. Doing so will provide immense competitive benefits.

Read the full report to learn more about the survey findings and what actions banks can take today to position themselves to seize the opportunities offered by new, intelligent platforms.

Andrew Poppleton

Senior Managing Director – Accenture Financial Services Technology Advisory


Todd Pingaro

Managing Director, Advisory – Accenture Financial Services Technology


Peter Sidebottom

Managing Director – Accenture Strategy, Financial Services

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Read more about the survey results in the full report and infographic provided by Oxford Economics and Accenture.

Retail banks: Well-prepared for digital innovation

Infographic

Survey results, by the numbers.

10 minute read

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