The digital transformation of banks will be accelerated by COVID-19, according to a new report from the Economist Intelligence Unit (EIU).
The report was shaped by 305 respondents from commercial, private and retail banks across every continent. The bankers were contacted throughout February and March 2020 and asked for insight regarding the challenges banks are facing relating to the digitisation of the sector, and the strategies they are deploying in response
Two-thirds of the executives believe that new technologies will have the greatest impact on the global banking sector in the next five years – a figure almost double that from the result the year before.
“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,” said Max Chuard, CEO at Temenos, the banking software company which commissioned the research.
“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 digitisation of banking continues, these new technologies can help banks fend off competitors and gain competitive advantage.”
Nearly half (45%) of the banking respondents indicated their strategic response to the rapidly increasing digitisation is to build a “true digital ecosystem” and integrate their services and third-party offerings.
Notably, 77% of respondents agreed that unlocking value from Artificial Intelligence (AI) will be a key differentiator between winning and losing banks, with improving user experience through greater personalisation seen as the most valuable use for AI.
“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,” said Pete Swabey, EIU editorial director EMEA - thought leadership.
“Now, as digital banking surges as a result of the coronavirus crisis, this task is more pressing than ever.”
