New research from Economist Impact supported by Temenos has revealed that almost half of European banks are investing in fintech start-ups while 36 per cent are building their own greenfield digital bank or fintech company.
The study looks specifically at the attitudes of banks in Europe as it identifies that the majority believe neobanks will be their biggest challengers in the near future. Titled, Challenging the challengers: Europe’s banks face the competition, the report also found that European banks are migrating core banking systems to public cloud and SaaS in greater numbers than their counterparts in other regions.
It set out to understand emerging trends in the banking industry. This report presents insights from a global survey of 300 executives in retail, commercial and private banking spanning Europe (25 per cent), North America (23 per cent), Asia Pacific (18 per cent), Middle East and Africa (17 per cent), and Latin America (17 per cent).
Respondents perform various job functions, such as IT, customer service, finance, marketing and sales, strategy and business development, and general management, among others. Half of the respondents were C-suite executives. This is the seventh year that Economist Impact has conducted this survey. The research also included interviews with industry practitioners to gain further insights.
Jonathan Birdwell, global head of policy and insights, Economist Impact said: “Fintechs and neobanks took the lead in using new technologies to provide better customer experiences. European banks are now fighting back, emulating the way non-traditional players have used technology to reach consumers who had been underserved by traditional financial services, and to appeal to existing customers with support in managing their personal finances.”
Banks priorities
The report reveals payment players and technology providers continue to be top of mind, with payments being the space European banks predict new entrants will gain the most market share. HSBC recently launched Zing, a new multi-currency payments app to compete with the likes of Wise and Revolut.
Over a fifth (21 per cent) of European banks see cloud as a strategic priority, ensuring their operations are agile and secure to compete with more nimble competitors. AI is also a key part of their technology investment strategy, particularly to improve the customer experience and support digital marketing, with three-quarters (75 per cent) of European bankers believing that the banking sector will be significantly impacted by generative AI.
A shifting landscape
Kanika Hope, chief strategy officer, Temenos said: “The competitive landscape is shifting. As neobanks and fintechs experience growing pains and face funding difficulties, Europe’s banks are taking advantage of the opportunities afforded by open banking by pursuing collaborations with their challengers to offer a wider range of better services to their customers. They are also investing in technology, using cloud-native banking platforms and SaaS to improve the customer experience and ensure their operations are agile and secure.”
Temenos, a trusted SaaS provider to 700 banks, recently launched end-to-end SaaS services for Retail, Business and Corporate Banking with over 120 pre-configured products, processes and 700 APIs, to enable banks to deploy software solutions in just 24 hours and significantly reduce modernisation costs. The company also recently announced Temenos LEAP, a new AI-powered offering that helps banks modernise faster to the latest cloud-native Temenos technology.
Image and article originally from thefintechtimes.com. Read the original article here.