A new global survey conducted by the Economist Intelligence Unit on behalf of banking software company Temenos has found that banking executives are becoming more synchronized in their position on the importance of technology in the future of banking.
The study, now in its seventh year, surveyed over 300 senior banking executives from around the world, with almost half holding C-suite positions in their respective countries. This year's survey was conducted between February and March 2020.
This recent survey found that two-thirds (66 per cent) of banking executives now believe that new technologies will continue to drive global banking in the next five years, compared to 42 per cent in 2019.
Further, over three-quarters (77 per cent) of respondents agreed that unlocking value from Artificial Intelligence (AI) will be a key differentiator between winning and losing banks, while improving user experience through greater personalisation ranked highest (28 per cent) among the most valuable uses for AI.
Meanwhile, 84 per cent of respondents agree that DevOps, which brings together software development and IT operations using cloud-based platforms, will drive transformation in core banking, while 81 per cent of banking executives believe a multi-cloud strategy will become a regulatory pre-requisite.
The results also found that the primary focus of banks’ technology investment is on cybersecurity (35 per cent), followed by developing AI platforms such as digital advisors and voice assisted engagement channels (33 per cent), and cloud-based technologies (27 per cent).
Executive bankers also stated they believe that COVID-19 is likely to accelerate the digital transformation of banks, which already face intense competition from payment players, Big Tech and e-commerce firms.
With COVID-19 accelerating the digitization of banking, 45 per cent of banking respondents said their strategic response is to build a ‘true digital ecosystem’ to better service customers and develop new revenue streams.
Max Chuard, Temenos chief executive officer, said: “Banks were under huge pressure due to new competitors, ongoing regulation and slowing profit growth – these pressures have intensified as a result of the pandemic.
“The report highlights that senior banking executives believe that new technologies such as AI will have the greatest impact in banking in the coming years. As the digitization of banking continues, these new technologies can help banks fend off competitors and gain competitive advantage.”
“Trends toward digital banking, cloud and SaaS models will only become more pronounced – in the new normal, the need for modern banking technology will be greater than ever,” Mr Chuard added.
Pete Swabey, an editorial director from The Economist Intelligence Unit, said: “Retail, corporate and private banks were already under pressure to deploy new technologies quickly and change their cultures in order to compete with big tech firms and payment players and deliver an engaging digital experience.
“Now, as digital banking surges as a result of the coronavirus crisis, this task is more pressing than ever.”
Hannah Dowling is a journalist for mortgage business, the leading source of news, opinion and strategy for professionals working in the mortgage industry.
Prior to joining the team at Mortgage Business, Hannah worked as a content producer for a podcast catering to property investors. She also spent 6 years working in the real estate sector at a local agency.
Hannah graduated from Macquarie University with a Bachelor of Media and Journalism.