More and more of the world’s leading banks are investing in technology to drive future growth.
The global banking tech landscape
The percentage of banks’ IT spend going into new technology has grown consistently year on year since 2013, with the figures for this year estimated to be 29% for Europe and 40% for the US respectively. These figures are forecast to rise to 33% and 48% respectively by 2022.
The “Future Of Finance Report” created for The Bank of England stated “Finance is likely to undergo intense change over the coming decade. The shift to digitally-enabled services and firms is already profound and appears to be accelerating.”
“Creating digital capability” is the top current priority for banks, with 28% of banks prioritising this over other technology initiatives such as managing security and adopting cloud services. But the question is why?
What's driving the change
The answer is simple. It’s what their customers want and is one of the best ways to attract and retain business. More and more people are using services like online banking, with a high proportion of those also using the mobile app versions of this provision on their smartphones. Similarly contactless payments and payment apps are increasingly pervasive, becoming the norm in many developed markets.
Consumers are looking to technology to simplify their experience, reduce waiting times and increase their day to day control over their financial situation. As more and more people adopt digital solutions to manage their day-to-day financial affairs, it doesn’t require a crystal ball to predict that the same demand will grow in longer range financial planning and investment services, particularly as more digital natives enter the affluent and high net worth bracket. With this in mind a digital investment platform should form part of your digital roadmap.
A research report stated that 88% of traditional banking organisations are afraid of losing business to fintech companies in areas such as money transfers, investments, loans and payments. In response, firms are either trying to build out their own technology solutions or are turning to fintech firms to partner with them in delivering solutions like white label investment platforms.
What are the critical areas of technology for banks to invest in?
Artificial Intelligence:
Robo advisors and security solutions with inbuilt AI and machine learning capabilities are just a couple of examples of the ways that artificial intelligence is already at work in the banking industry. An example of this is AI being used to deliver personalised wealth management in investment services as opposed to a more generic service offering that’s been the norm until now.
Customer Experience:
With consumers driving the digital revolution in banking, investment in digital platforms that provide slick UX is essential for any traditional banking organisation to stay relevant and competitive.
Cyber Security:
As more sophisticated attacks are deployed on a daily basis, the drive to employ technology of a superior level to protect against them has never been more essential to avoiding operational and PR disasters that damage the brand and have a negative impact on customers.
Read our whitepaper on 'The Future of Money Management'
At Nucoro, we believe that innovative investment experiences will define which firms continue to be major players in the market in years to come. For more information on how we can partner with you to drive your bank’s digital transformation, please contact: solutions@nucoro.com
