Temenos (SIX: TEMN), the banking software company, today announced that it has published the European results for its retail banking survey, conducted by the Economist Intelligence Unit (EIU), “A Whole New World: How technology is driving the evolution of intelligent banking in Europe”. The largest share of European bankers sees embracing openness as the future of the industry: 35% of respondents view acting as a true digital ecosystem — offering both banking and non-banking services that originate either internally or from third-parties to customers and other financial services providers — as the primary direction in which their organization’s business model will evolve.

Unsurprisingly, given the mandate of Payment Services Directive (PSD2), launching an open banking strategy is a top priority for the coming year for 29% of European respondents. Open banking will still be a priority in 2025 for 26% of respondents, although more expect to be prioritizing responding to regulation (35%), migrating clients to digital channels (29%) and mastering digital marketing (29%) by then.

Technology-driven change is following a specific agenda, geared toward complying and fully utilizing PSD2. For consumers, PSD2 will deliver seamless, open, accessible and intelligent banking services. For banks, there are both opportunities to better serve their customers, and challenges in managing compliance and competition.

In the years leading up to 2025, non–banks see technology and e-commerce disruptors such as Google, Facebook and Alibaba (31%), and payment players such as PayPal and Apple Pay (23%), as their biggest non-traditional source of competition. And yet as banks struggle to figure out where they fit in the picture, they are also looking at how to evolve their business models. The bigger question for banks is how they will continue to create value for customers in a highly digital, highly disaggregated banking system. The report points out that European banks are increasingly open to the idea of becoming the architects of an ecosystem of services, many of which are provided by third-parties.

Steen Jensen, Managing Director – Europe, Temenos, said: “The big question for banks is how to create value in a banking ecosystem that is highly digital, open, and disaggregated. In order to remain competitive, they must offer customer journeys, digital experiences and innovative products and services that their customers can’t get elsewhere, by digitally transforming their operations, using advanced analytics and tapping into new technologies like artificial intelligence and machine learning.

“Temenos empowers banks with an end-to-end digital banking platform that is API-first, cloud-native, and cloud agnostic, which gives banks the freedom to innovate and achieve tangible business benefits. By partnering with Temenos, banks can also easily integrate with an ecosystem of over 150 fintechs, and provide their customers with an unrivalled digital experience.”