The new report from Financial Times Focus and Mambu shows that banks need to reposition themselves and embrace technology to avoid “extinction.” Report findings illustrate the urgent need for banks to modernize their offerings, with 58% of respondents globally predicting that they will cease to exist altogether in the next five to ten years unless they change their models. commercial.
The “Evolve or Die” report reveals that two out of three banks (67%) believe they will lose market share within two years if they fail to digitally transform.
Cloud-based banking platform Mambu and The Financial Times Focus (FT Focus) surveyed more than 500 senior banking executives around the world to better understand their perceptions of the banking industry, now and in the future.
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“The past 18 months have shown banks how important it is to them to have a robust and agile digital banking offering,” said Elliott Limb, director of clientele at Mambu. “And with 53% of respondents admitting they risk missing their digital transformation goals, it’s time for the industry to take note of the financial ‘evolutionary’ leading the charge in this space. These are fintechs, challenger banks and traditional forward-thinking players who prioritize goal-oriented services and a great customer experience. “
Big data, ML, blockchain
In terms of geography, the report found that Asia Pacific (APAC) lags behind other regions in terms of digital transformation. Recognizing this, banks are planning to increase their investments in different technological areas, including big data, machine learning and blockchain.
“While the firm commitment of APAC banks to increase their investment in new technologies is very positive, banks in the region also need to change the way they approach innovation and start proactively embracing new partnerships and collaborations.” , said Myles Bertrand, Managing Director of Mambu. , APAC. The ‘ecosystem’ approach has been incredibly successful in other regions, and with half of APAC banks fearing that they lack the in-house workforce skills needed to transform, it will prove to be highly effective. here too. “
Globally, 40% of those polled said they plan to modernize to a platform-based offering after the pandemic, working with third-party providers to develop plug-in banking services. -and-play run on flexible and independent systems. Modernizing to a platform-based structure and investing in data capabilities are key factors that separate digitally advanced businesses from the rest of the banks.
The report also found that outdated perceptions of banking are slowing progress at a time when ESG (environmental, social and corporate governance) goals and customer experience are expected to be the main growth drivers of the future.
The survey also found that 81% of retail banking executives strongly agree that replacing outdated mindsets with a progressive social goal is vital for the growth strategy, as this statistic is reflected in the fact as profits fall to the bottom of banks’ priority list, with “increased income” ranked as only the fifth biggest benefit of moving to a customer-centric banking model.
With nearly a quarter of banking executives describing their digital strategy as ‘nascent’ or ‘exploratory’, the results reflect the need for greater collaboration within the banking community, as well as the opportunities for forward-thinking players. who embrace innovation through fintech ecosystems. .