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.

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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."