According to Temenos, North American banks are embracing disruptive technology faster than ever, boosting industry competition.
North American bank executives were polled as part of an Economist Impact study, which was commissioned by Temenos, a provider of banking software, to learn how investment strategies have changed to reflect the industry’s growing reliance on technology.
Can disruptive technologies make North American banks more competitive? is a Temenos report. discovers that, despite historically trailing their international counterparts in implementing contemporary technology, North American banks are starting to change that pattern.
In an effort to increase their customer base and compete more effectively with non-financial and fintech businesses, ninety percent of North American banks stated in the poll that they believe technology will have the largest impact on their industry in the next five years. This contrasts with 63% of banks worldwide.
North American banks are also prioritizing the migration of domestic core banking to the cloud at a higher rate than their global counterparts (36% of North American banks versus 26% of banks worldwide). Furthermore, compared to 60% of respondents in Europe, 79% of respondents in North America stated that a multi-cloud strategy will be required by law within the next five years.
Linda Powell, BNY Mellon’s (BNYM) deputy chief data officer, was quoted in the report as saying, “Every bank that I know of is looking into moving to the cloud because you can go to scale faster.” You may add a variety of technologies to your data to generate insights and assist with execution if you have a solid foundation for it. In order to better serve our clients and deliver the services they require, the business lines can utilize the data to expedite processes.
An emphasis on DevOps
Furthermore, a significant portion of North American banks—24 percent, as opposed to 18 percent worldwide—are concentrating their IT spending on DevOps. Banks are able to expedite modifications to their back-office procedures and core systems thanks to this. Banks in North America are more likely than any other region to view artificial intelligence (AI) as a useful tool for detecting client fraud (20% vs. 11% in Europe and 13% worldwide).
“North American banks expect competition from non-traditional players in the tech and e-commerce space, such as Google, Facebook, and Microsoft,” stated Jonathan Birdwell, global head of policy and analysis at Economist Impact. As a result, in order to take full advantage of new technologies, manage the expansion of data, and safeguard market share from non-traditional competitors, companies are shifting an increasing number of applications to the cloud.
Promoting more cooperation
Furthermore, the study indicated that agility and competitiveness could not be sustained without cooperation with fintechs and other technology suppliers. Compared to 32% of their international counterparts, 40% of banks in North America are taking part in sandboxes with fintech and other technology firms to test innovative ideas.
“The fear of falling behind and missing out on new markets is pushing North American banks towards greater adoption of disruptive technologies,” said Philip Barnett, head of Temenos in the Americas. With the aim of modernizing and safeguarding their basic infrastructure and customizing client experience and engagement, banks in this region are placing significant bets on technology.
“Technology investments are also helping banks compete in newer spaces, like embedded finance, where their competitors have led the way, as well as on banks’ traditional turf against fintechs and non-financial companies.”
