Banking industry accelerates digital adoption

During the pandemic banks have undergone a rapid digital adoption process, with 89 percent boosting their implementation of technology by as much as five years.

Research by analytics company SAS shows traditional banks have overseen a marked rise in the adoption of new technologies with 93 percent accelerating their digital adoption compared to 87 percent of challenger banks.

Priorities differ when it comes to how traditional and challenger banks use technology though. For example, 65 percent of challenger banks see offering their customers a more personalized service as a key point of differentiation, compared to just 53 percent of traditional banks. Meanwhile, a further 65 percent of challenger banks see being data-driven as a competitive advantage, compared to 33 percent of traditional banks.

In addition 53 percent of traditional banks recognize the use of artificial intelligence and machine learning as areas where they can get a competitive edge, compared to 39 percent of challenger banks. Linked to this is the fact that 83 percent of all respondents agree that investment in data analytics over the next three-to-five years would be significant.

Johnny Steele, head of banking at SAS UK and Ireland, says:

While traditional and challenger banks have accelerated their adoption of technology rapidly during the pandemic, their priorities remain broadly the same. In essence, as things stand, they will be using the new technology to double down on their pre-existing competitive advantages.

However, this is an opportunity for banks to innovate in a different way. Traditional banks, for example, can use their deep resources to provide a broad portfolio of services to their customers, as 13 per cent are already prioritizing. At the same time, though, through cloud-based advanced analytics, traditional banks can ensure that these new services, and the ones they already have on offer, are deeply personalized and easy to use. This means being able to complete banking processes almost entirely online, without having to go in-branch or speak to someone on the phone. Increasingly, this is what customers demand from their bank. Therefore, whether it's challenger or traditional banks, it's crucial that they can offer a frictionless service which is also fairer and simpler for their customers.

Banks will increasingly need to manage data workloads via the cloud to get full value from the technologies they have adopted. However, 61 percent cite security and compliance concerns as a key barrier to cloud adoption. Meanwhile, 87 percent of traditional banks say legacy system integration is the main barrier.

You can find out more in the full report, available from the SAS site.

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