Traditional banks still hold the overwhelming majority of consumer accounts, but many need to work with fintechs and other participants in the financial ecosystem to stay relevant.
sopra banking softwareSecond Annual of ‘digital banking experienceBanks still hold 92% of consumer accounts, according to a (DBX) report, but banks alone cannot provide a competitive banking experience.
The report provides a first-hand look at how banks are tackling their digital transformation and reveals the obstacles impacting their ability to meet consumer financial expectations.
We know that the delays themselves create opportunities for both digital challengers and traditional companies with banking ambitions.
The report reveals the intentions of banks desperate for change. 34% cite this goal as a “key priority”. But the survey results show that a high percentage feel they lack the foundation to achieve this. More specifically, 49% believe they lack a rounded operating model to create digital transformation.
Responses identify collaboration and cross-functional ways of working among the challenges faced in this process.
Embarking on digital
The digital shortcomings of banks are creating a gap between banks and consumers. The inability to meet customer demand is driving a shift from traditional services to digitizable services.
For example, US traditional banks now hold 92% of all consumer accounts. However, the report also shows that almost half have accounts in digital-only banks.
In addition, it indicates a willingness to bank with non-bank companies such as: Amazon When appleSimilarly, 37% would consider banking with social media companies such as: Facebook Also tick tock.
Taking these consumer opinions into account, it is clear that challengers’ growing share of the market pie is causing some backlash among banks.
As such, 77% admit to feeling pressure to work with fintechs and other participants in the financial ecosystem to stay relevant.
Similar numbers still see these newcomers as a threat to their existence, but feel they want to work with them. new law And consumer expectations are getting higher and higher, and we can’t meet them alone.
“For the first time in history, banks will have to adapt their model for the future. Erik BieryCEO of Sopra Banking Software.
“But to do this, we need an understanding of what the future financial ecosystem will look like and a path to get there. To provide that roadmap, we created the Digital Banking Experience Report. Did.”
Banks believe the opportunities presented by partnering with fintechs outweigh the threats. In fact, this action has allowed us to overcome many of the aforementioned challenges associated with digital transformation.
Nearly three-quarters of banks see partnerships as an opportunity to increase revenue, improve customer loyalty, reduce time to market and improve customer experience.
In addition, 65% said they would prefer to outsource new technology to a third party rather than building it themselves. As such, the role and revenues of future banks are largely defined by service-based models.
52% are already offering their capabilities to third parties to enable new revenue streams, but three-quarters agree that this “as-a-service” approach will be their primary business model in the future .
This sentiment is certainly shared in the industry, as explained in this corresponding webinar produced by Fintech Times.
Feature editor here Polly Harrison Join industry leaders to discuss exactly what collaboration means for banks and their challengers. The debate also highlights how banks and fintechs have helped each other while remaining competitive.
Age of Great Reason
“It is not necessarily a bad thing that banks are not digitizing. It is recognizing the challenges of transformation,” he said. Jacob MorganPrincipal Analyst forester.
“Banks recognize that it is time to align their digital goals with those of their consumers and third parties. I take time to internalize the changes I need to make.”
Findings for this report are based on Forrester survey responses of 792 senior banking leaders responsible for credit and lending, customer experience, digital banking, open banking initiatives, payments, and technology stacks at banks in 50 countries .
Sopra Banking Software also partners Ipsos It explores how banks are meeting the expectations of 12,500 banking customers in 14 countries, then focuses on responses from 1,000 respondents in the United States.