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.
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.
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.
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.