According to Finextra’s The Future of Payments 2019 report, it’s been “the year of digital transformation for legacy-era brick-and-mortar banking giants.”
And collaboration is overwhelming the favored path to get there.
At EBADay, hosted by Finextra in association with the EBA, it was reported that 81% of banking executives would seek to collaborate with partners to better, more successfully execute digital transformation.
While collaboration was the clearly-favored choice, some respondents did choose options for digital transformation that either kept the process in-house, or completely outsource it:
- 8% would build a new operating layer on their own
- 6% would outsource processes
- 5% would create a new bank “on the side”
When asked to describe digital transformation (DX), 55% said that it means fully changing an institution’s fabric. For others, DX means:
- Offering more innovative products while reducing costs (20%)
- Replacing and renewing the core banking operating system (13%)
- Offering digital channels such as mobile (12%)
Thanks to consumer demand, banks have been forced to step up and introduce new products and services that leverage current and emerging technologies — all in the name of giving customers better choice.
As it stands, customers of the retail banks are able to deposit cheques, transfer funds, and apply for loans via their smartphones.
“This collaborative attitude underscores how the rise of digital banking may not need to be an all-out competition between incumbents and startups,” explains Business Insider, “and may even tilt the scales in the direction of collaboration.”
And it looks like it’s already been happening: Lloyds found that 48% of financial services they polled said they have completed acquisition deals for fintech firms, or have taken a minority or majority stake in them.
