Banks Trailing in Digital Maturity: Infosys Finacle and Efma’s 2020 ‘Innovation in Retail Banking’ Report
- 12.11.2020 05:25 pm
Infosys Finacle, part of EdgeVerve Systems, a wholly-owned subsidiary of Infosys (NYSE: INFY) and Efma today unveiled the ‘Innovation in Retail Banking’ report. The report highlights the top trends that are transforming the way banks operate and engage with customers, with a special focus on their plans and actions in the wake of the COVID-19 pandemic. More than 750 banks and financial services companies from across the world participated in the 12th edition of the report. Jim Marous, publisher of the Digital Banking Report and co-publisher of The Financial Brand authored the report.
With the present medical crisis looming large, the report revealed significant opportunities for digital maturity. Only 7 percent of respondent banks have deployed digital transformation initiatives at scale with commensurate benefits. Further, many banks have shown a dip in their self-perception this year, with only 9 percent saying they were innovation pioneers, compared to 14 percent last year.
Scaling digital transformation, improving customer engagement and cost management, however, have emerged as the top three priorities going forward, for banks, with focus on agility driven by cloud adoption. Respondents have spoken of increased investments in mobility, advanced analytics and open banking APIs, as areas expected to have the biggest impact on banking over the next 12 months. Read the full report here.
Key takeaways from the report include:
• Banks have identified 7 keys to digital transformation, with the most important components being leadership / culture, data and analytics and CX
• While there is an understanding of the importance of digital transformation, most firms rate their efforts as insufficient, with 62 percent stating their digital deployment as partial or digital investments not delivering as expected
• Respondents voted their three biggest challenges for undertaking digital transformation as – time and cost of implementation (71 percent), system integration (66 percent) and legacy technology landscape (62 percent)
• Mobility (73 percent), Open APIs and AI / Advanced Analytics / Machine Learning (64 percent) were seen as the most important technologies having the biggest impact on banking over the next 12 months, with cloud computing (58 percent) being an area of great importance in the future.
• Much of the innovation in 2020 was seen as having taken place in Lending (40 percent) and Payments (38 percent)
• Over 64 percent identified product delivery channels as an area which would see an overwhelming preference for innovation over the next five years
Sanat Rao, Chief Business Officer & Global Head, Infosys Finacle, said: “Amidst the pandemic challenges, ensuring employee safety, fulfilling remote service delivery and extending credit lines to help business clients have consumed banks’ attention. At the same time, banks have also had to allay shareholders’ concerns about growth, profitability and valuations. The Efma-Infosys Finacle Innovation research results highlight that the only way to balance these priorities is to scale digital transformation, across customer engagement, cost management, business model innovation and people empowerment. While digitizing at speed and scale is the only way for banks to survive, revive and eventually thrive, the study reveals that banks have a long way to go on the implementation front.”
John Berry, CEO at Efma, adds: “This year has proven that more than ever the financial services industry continues its evolution towards digital banking transformation. Even the most innovative players are now facing strong competition from tech companies and fintechs and must continuously innovate to stand out. Customer engagement is centre stage for future success.”
Jim Marous, Owner and CEO of the Digital Banking Report, comments: “With the onset of COVID, building an innovative culture became more important than ever in banking. As organizations ramp up their digital transformation efforts, the application of data and advanced analytics, combined with the deployment of new technologies to support redefined business models will set leaders apart from followers in banking.”