A majority of global banks are considering collaboration with financial technology firms (fintechs) as an essential element in their digital transformation strategies, according to a survey conducted by IDC Financial Insights and sponsored by SAP.
The study, which surveyed respondents from 265 retail and corporate banks in 24 countries, found that 34% of banks are willing to partner with a fintech firm, while 25% are open to considering an acquisition.
The study also found that most of the digitally transformative initiatives are still business-led "islands of innovation", though true business-wide digital transformation is rare.
North America puts core focus on digital transformation as a business enabler, with 40% of the region’s banks investing over a quarter of their IT budget in these initiatives. Also, 20% of banks in the US view digital transformation as an organisational strategy.
Investment in EMEA banks is driven by customer centricity, with 57% believing improved customer experience as the result of digital transformation.
Forty four percent of digital transformation initiatives in EMEA are mainly focused on the front office, while less than 25% of the banks in the region have already incorporated a strategic enterprise-wide approach to digital transformation.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
In Latin America, 24% of the digital transformation initiatives are focused on back office, while 42% are focused on the front office, the report noted.
In Asia Pacific, 29% of banks have already implemented an organisation-wide digital transformation strategy, which is higher than the 28% worldwide.
However, only 41% of banks in in Asia Pacific focus on improving the customer experience, compared to the global average of 50%, the report added.
SAP global head of financial services Rob Hetherington said: "Banks are in the midst of digital transformation, looking for ways to speed their time to market and to deliver new value or services to customers.
“Start-ups on the other hand are mobile, agile and built solely for the customer, yet they lack the regulatory know-how and customer confidence that large, global banks have. Both have something the other wants, and I anticipate that we'll witness far greater collaboration, integration and – in some instances – acquisitions happening in the next year."