Singapore, Sept 17: Two in three (67 per cent) banks believe they will lose market share within two years if they fail to digitally transform, according to a new report from cloud banking platform Mambu and The Financial Times Focus (FT Focus).
The ‘Evolve or be extinct’ report was conducted by FT Focus and surveyed over 500 senior banking executives globally to gain insights into their perception of the banking industry, now and in the future.
“The research illustrates how the banking industry is diverging on its approach to digital transformation,” Mambu’s Managing Director APAC Myles Bertrand said.
“While less than one third of APAC banks describe their digital transformation strategy as mature or advanced, there’s an emerging cohort of digital ‘evolvers’ that is bucking this trend and really leading the way.
“These forward-thinking players are setting a blueprint for the rest of the industry to follow while demonstrating the business case for a customer-centric approach.”
The results illustrate the urgent need for banks to modernise their offerings, with 58 per cent of global respondents predicting they will completely cease to exist in the next five to ten years unless they change their business models.
Looking more closely at Asia Pacific, the FT Focus report indicates that the region is lagging behind other regions on transformation, however, APAC banks are taking steps to ‘catch up’ to the rest of the world, with plans to increase investment in big data, machine learning and blockchain at significantly higher rates than other regions.
“And while the strong commitment from APAC banks to increase their investment in new technologies is very positive, banks in the region also need to change the way they approach innovation, and start proactively embracing new partnerships and collaborations.
“The ‘ecosystem’ approach has been incredibly successful in other regions, and with half of APAC banks concerned that they lack key internal workforce skills necessary to transform, it will prove very effective here too.”
The report also highlights the slow progress and challenges banks are facing as they move away from traditional and legacy banking services towards digital.
With nearly a quarter of banking leaders describing their digital strategy as either ‘nascent’ or ‘exploratory’, the findings reflect the need for greater collaboration within the banking community, as well as the opportunities for forward-thinking players that embrace innovation through fintech ecosystems.
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