The new report from the Economist Intelligence Unit and Temenos is based on a survey of 400 global banking executives.
For the first time in the 5-year history of Temenos’ retail banking survey, technology and digitisation have emerged as bigger trends than regulation.
The report, entitled Whose customer are you? The reality of digital banking, shows that 73 per cent of bankers believe retail banking will be at least 80 per cent automated in the next two years. A further 78 per cent see ‘platformisation’ steering the market in the future.
But these developments raise possible challenges, as well as opportunities. Almost half of the executives surveyed believe that a cyber attack will have caused at least one systemic bank failure within the next two years.
The impact of such fears on industry spending seems mixed. For example, 71 per cent of respondents are focusing their digital investment budget on cyber security, up from 34 per cent last year. Yet a mere 17 per cent are thinking about the risks of third-party integrations under Open Banking.
Furthermore, despite the emphasis placed on digitisation as a trend, still 61 per cent of respondents see a place for the traditional transaction-based branch model in banking. Meanwhile, a mere 21 per cent back Artificial Intelligence’s chances of improving customer experience.
“Although the banks may benefit from the fintechs’ missteps, they must remember that the trust customers have in their bank will mean little if it cannot provide the services that accommodate their lifestyle needs,” said Renee Friedman, the editor of the report from the Economist Intelligence Unit.
Of the 400 global banking executives surveyed by the Economist Intelligence Unit on behalf of Temenos, 51 per cent were C-Suite level and a further 10 per cent were board members. Temenos is a leader in banking software.