Economist Impact Research for Temenos Shows North American Banks Betting Big on Technology
North American banking executives are turning to digital technologies to modernize legacy systems and compete with non-traditional players, according to the report
NEW YORK and GENEVA, Switzerland – November 20, 2023 – North American banks consider technology to be the biggest trend impacting their industry – and are focusing their investment strategy accordingly, finds an Economist Impact study, commissioned by Temenos, which surveyed bank executives in North America.
The report, “Can disruptive technologies bolster the competitiveness of North American Banks?,” finds that while North American banks have traditionally lagged their global counterparts in adopting modern technology, that trend is shifting. The study revealed 90% of North American banks believe technology will have the biggest impact on their industry in the next five years – compared to 63% of banks globally – as they aim to better compete with fintechs and non-financial companies and expand their customer base.
Banks in North America also are prioritizing moving domestic core banking to the cloud more so than those in other regions (36% of North American banks vs. 26% of banks globally). Further, 79% of North American respondents said that a multi-cloud strategy will become a regulatory pre-requisite in the next five years, compared to 60% in Europe.
Quoted in the report, Linda Powell, Deputy Chief Data Officer at BNY Mellon (BNYM), said: “All of the banks that I’m aware of are exploring moving to the cloud, because you can go to scale faster. If you build a good foundation for your data, you can bring in all sorts of technology on top of it to create insights and support execution. The lines of business can really accelerate and use the data to serve our clients and provide the services that they need.”
In addition, nearly a quarter of banks in North America (24%, compared with 18% globally) are focusing their technology investment on DevOps. This is helping banks to speed up changes to their core systems and back-office processes. North American banks see Artificial Intelligence (AI) as a valuable tool for customer fraud detection more than any other region (20%, versus 11% in Europe and 13% globally).
Jonathan Birdwell, Global Head of Policy & Insights, Economist Impact, said:
“North American banks expect competition from non-traditional players in the tech and e-commerce space, such as Google, Facebook, and Microsoft. As a result, they are increasingly moving applications to the cloud to best utilize emerging technologies, handle the growth of data, and protect market share from emerging non-traditional entrants.”
In addition to investing in cloud capabilities, the survey found collaboration with fintechs and other technology providers is seen as central to staying agile and competitive. Forty percent of North American banks are participating in sandboxes with fintech and other technology providers to test new propositions compared to 32% of global peers.
Philip Barnett, President – Americas, Temenos, commented:
“The fear of being left behind and missing out on new markets is pushing North American banks towards a greater adoption of disruptive technologies. Banks in this region are betting big on technology, with the goal of modernizing and securing their core infrastructure and personalizing customer experience and engagement. Tech investments are also helping banks compete with fintechs and non-financial companies, both on banks’ traditional turf and in newer spaces, such as embedded finance, where their competitors have led the way.”
About this research:
Economist Impact conducted a study, commissioned by Temenos, to understand emerging trends in the banking industry. This report presents insights from a global survey of 300 executives in retail, commercial and private banking spanning Europe (25%), North America (23%), Asia Pacific (18%), Middle East and Africa (17%), and Latin America (17%). The survey as completed during July 2023. Respondents perform various job functions, such as IT, customer service, finance, marketing and sales, strategy and business development, and general management, among others. Half of the respondents were C-suite executives. This is the seventh year that Economist Impact has conducted this survey. The research also included interviews with industry practitioners to gain further insights.
Temenos Press Contacts
Scott Rowe
Temenos Global Public Relations
+44 20 7423 3857 [email protected]Gabriel Goonetillake
Edelman Smithfield for Temenos
Tel: +44 7813 407710 [email protected]