Around three quarters of European banks are using outdated core systems, affecting their ability to innovate and accelerate growth, according to a survey commissioned by vendor Infosys.
The poll of 65 C-level executives at European financial institutions, carried out by Ovum, shows that 80% of respondents think that outdated core banking systems are causing them to struggle to bring new products to market quickly.
The survey reveals that three quarters of the banks face difficulties getting access to timely data, and close to two thirds feel that existing systems do not support regulatory change.
Meanwhile, more than half of respondents say they are focusing on increasing wallet share within the existing client base, with only 20% trying to achieve growth through new customer acquisition. However, providing a unified customer experience across channels is an issue for about half of European banks, impacting their ability to effectively cross-sell.
Technology systems are seen as a stumbling block rather than an enabler when it comes to carrying out process change led by the business, say three quarters, while 80% think the complexity of IT, combined with insufficient expertise within the business, is a major barrier to core system replacement.
Daniel Mayo, practice leader, financial services technology, Ovum, says: "There is a clear disconnect between market needs and market capabilities when it comes to core banking systems. Many banks are trying to restore revenue and drive growth through better servicing and cross-selling to their existing customer base. While European banks with modern packaged systems have faith that they are equipped to tackle the challenges in the coming years, those using older core banking systems do not."
Recent research from Celent suggests that the global core banking market was worth around $4.8 billion last year and is expected to grow to $5.1 billion by the end of 2013. However, the firm does not expect to see a surge of activity in Europe, predicting that any growth will come from less mature markets such as Asia and Latin America.