Banking Industry Undergoing a Second Bing Bang
By Grey Thomas – Staff Writer
Temenos, the market-leading provider to the financial services industry, have announced the results of its seventh annual customer survey based on the opinions of 198 senior bankers.
The survey covers areas such as banks’ corporate and IT priorities, their challenges, and their view of the competitive environment, as well as showing how views have changed over time.
According to the survey, banking industry is facing few challenges ahead, with product innovation its number one investment priority, cited by 24 percent of respondents while for retail banks it stands at at 26 percent.
Other industry concerns such as regulation, new competition and changing customer behaviour emerged as the biggest challenges. As in 2013, maintaining customer loyalty was the single biggest concern, cited by 30% of respondents, with bankers concerned that more empowered and better informed customers may begin to switch providers in greater numbers.
Amazingly, the biggest competition comes from within the industry and with technology vendors, such as Apple and Google cited by 23% of respondents.
With the growing trends, cloud computing continue to shift banks’ attitude with results showing that 86% of institutions run at least one application in the cloud, an increase from 57% in 2009, but concerns over data security are growing. This year, 38% of respondents said data security was the biggest barrier to more widespread adoption – a significant jump from last year’s results and likely influenced by revelations of NSA spying.
David Arnott, CEO, Temenos, said: “The banking industry is undergoing a once in a generation shift, a second big bang. As these results confirm, it is digitization, changing customer behaviour and regulation that are driving the change. What is encouraging about these results is that banks appear to be both cognizant of the challenges ahead and making many of the right investments to be able to offer the customer-centric banking services to compete successfully in the future.
Juan Pedro Moreno, Senior Managing Director of the global Banking practice at Accenture, which is an alliance-partner of Temenos, said: “For many banks, product innovation will need to go hand-in-hand with a new mind-set. The most innovative banks will no longer think of themselves as mere providers of financial products and services and enablers of transactions. They will be solution providers that play a greater role not just at the moment of transactions, but before and afterward as well.”
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