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INSIGHTS
80% of bankers see Open Banking as an opportunity, not a threat
2018 is the year of regulation, so is it surprising that bankers are scrambling to prove that they’re down with the kids? A survey from Temenos and Accenture shows they’re keener to innovate than you think
Senior Reporter Alex Hamilton
O
pen Banking is no problem for 80% of bankers, who are looking forward to using it as an opportunity, according to new research from Temenos, released in its 10th
annual banking survey.
The survey, which polled 248 bankers, was a joint effort by Temenos and Accenture. It revealed a majority of bankers are not just unafraid of the implications of Open Banking: 62% said that they would be prepared to distribute third-party products through their platforms and channels, compared with just 29% in 2016.
Fintechs are no longer the main threat – now it is other financial institutions in the crosshairs. New challenger banks are now perceived as the leading competition, cited by 22% of respondents. Many are working on their own digital initiatives to challenge the neobanks, but are struggling when it comes to working with startups, especially when it comes to internal procurement: 55% said that it was an issue.
Other challenges cited by the respondents were meeting regulatory requirements (17%), securing customer loyalty (17%), using data effectively (15%), addressing increased competition (15%) and managing the growing risk of cybercrime (10%).
In 10 years, respondents believe that only 7% of interactions will be in person (either physically or by videoconference), including only 15% for wealth firms. Some 83% of those asked thought the primary customer interaction channel would be chatbots and social apps.
When it comes to IT strategy, banks are recognising the need to renovate their core banking systems. Some 23% of respondents said that digitisation of their core was a top priority, while 32% of respondents said legacy systems represent the biggest barrier to digitisation, far ahead of issues such as lack of strategic focus (14%) or lack of skills (12%).
Open Banking could provide golden opportunities
“Banks increasingly recognise what it takes to succeed in the digital age. To compete effectively against challenger brands and internet platforms, they need to embrace end-to-end system replacement,” said David Arnott, CEO of Temenos. “This will allow them to digitise operations, offer data-driven and personalised customer experiences and open up their platforms to third parties. As the survey shows, banks are upping their investments in the right areas, notably core replacement.”
Alan McIntyre, a senior managing director at Accenture and head of its Banking practice, said: “As European banks ready their networks for compliance with Open Banking regulations such as PSD2, world banks are identifying opportunities to use Open Banking to drive new revenue streams by offering services to third parties, such as consumer credit checks and identity management.
“Banks have an opportunity to use their trusted position with consumers to own the customer relationship and provide the seamless digital experience customers want.”
www.ibsintelligence.com | © IBS Intelligence 2018
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