The rush to implement new digital technologies has overtaken regulatory worries as the highest priority for global banking executives, according to a new report from the Economist Intelligence Unit.
The EIU survey, which questioned 208 banking executives on behalf of Temenos, finds that implementing digital strategies (46%) is now a bigger priority for bank management than responding to regulation (35%).
Changes in customer behaviour and the arrival of new competitors are now seen in global banking circles as a bigger threat to the sector over the next five years, with regulatory pressure relegated to a secondary role.
When asked who those new competitors will be, over one-third (36%) cited technology and ecommerce companies like Amazon and Apple and a fifth (21%) pointed to non-financial services firms like traditional retailers, rather than new banks (13%) or payment players like PayPal (12%).
Retail banks are responding to the challenge with a range of customer-centric priorities such as implementing a digital strategy (46%), segmenting customers by product and service levels (40%) and adapting the size and role of the branch network (37%). Responding to customer demands, banks say they will improve pricing transparency (40%), implement better monitoring and governance (39%) and create simpler products (35%).
Monica Woodley, the editor of the report, says: "The growing ubiquity of smartphones and the experience that consumers have with online giants like Amazon are quickly reshaping what is expected of retail banks. They must respond to these trends or be left behind.”