The banking industry is increasing its focus on digitisation, according to a new report.
Temenos’ Shifting Sand: Banking Digital Era report indicates a significant change of priorities within the industry due to the easing of regulatory burdens the increased rate of digitisation.
According to the report, satisfying the demands of better-informed and less loyal customers remains the industry’s biggest challenge.
15% of respondents indicated concern about their ability to capitalise on their data assets, and the threat from non-traditional players was cited by 27% of respondents.
The biggest priorities of banks is investing in IT systems and innovation, both of which are seeing significant backing. In the same report last year, IT systems were only the fourth most commonly highlighted priority by respondents. This indicates a greater awareness of what is required to be successful in the digital age.
89% of banks surveyed are currently running at least one application in the cloud, and IT budgets are set to rise again in 2016. 64% of respondents expecting higher spend over the next 12 months.
“This year’s survey shows significant change in banks’ challenges and priorities,” said Ben Robinson, chief strategy and marketing officer at Temenos. “As the burden of new regulation diminishes, banks are concentrating on readying themselves for a more digital world, characterised by lower customer loyalty and new, multiform competitors.”
Robinson added: “What is encouraging is the extent to which banks are making the right moves, investing in acquiring the right talent, upgrading their distribution channels and replacing their ageing IT infrastructure. Technology modernisation, especially in areas like core banking and analytics, is essential to delivering richer and more personalised banking experiences. And only through increasing customer value-add can banks protect themselves against a more competitive environment.”
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