Global card issuing platform Marqeta has released a study that shows how banks are responding to the Covid-19 pandemic when changing their strategies.
Many banks are aiming to adopt digital banking services and cashless payments, in line with the changes in consumer behaviour.
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Scope of the study
A total of 200 banking executives were surveyed in the study.
According to the study report, Covid-19 has impacted 96% of European banks, of which over 78% are looking to change their future banking strategy.
Digital transformation
It has been reported that 80% of the banks accelerated their plans to transform digitally due to the rise in demand for digital services amid the pandemic.
Since the beginning of the pandemic, 76% of the banks believe that the priority to digitally transform by improving online and mobile banking experience has increased.
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By GlobalDataMeanwhile, 70% cited offering new payment services, as well as investing in security and anti-fraud solutions, and 66% cited modernising core banking and payment platform.
Future banking strategies
More than half (54%) of the banks are planning to trim their branches, while 72% are aiming to increase the number of digital services offered.
Moreover, 68% are looking to provision specialist payment services, while 66% aim to boost their investment in digital banking.
Additionally, as many as 92% of the lenders say that innovation has become increasingly important as a result of the pandemic.
Besides, 66% of the banks are set to increase their digital innovation capabilities.
In terms of innovation, 91% of the banks say that they need to improve their data analytics for making real-time lending decisions, as well as technology to prevent fraud.
Moreover, 90% of them also need to implement technology that gives control over what loans are spent.
Risk of failing
Additionally, all the surveyed banks have agreed to the investment plans in tokenised card technology and modern card programmes.
They acknowledged that it is risky to not keep up with the changes in consumer behaviours.
A number of banks (38%) said they cannot offer new payment features under existing services without innovation.
Moreover, a tad over one-third (34%) is afraid to lose their market share to competitors.
Other findings
Also, 89% of the banks agreed that Covid-19 has bolstered the change in the banking system from years to months.
Seventy-five percent of the banks “were not prepared” for the consumer behavioural changes brought about by the pandemic.
Further, 88% were overwhelmed by the demand for online and mobile banking.
Comments
Marqeta Europe MD Ian Johnson said: “Covid-19 has drastically moved up the timescales, with 36% of banks saying Covid-19 has “opened up the floodgates” to modernising core banking and payment systems.
“Banks are now speeding up efforts to transform because they know that the winners of the next age of banking will be determined by who can best adjust their strategy to adapt to the new normal.
“Banks need to ensure they are prepared to adapt for this world, and many are set to double down on digital services and capabilities. But to do this, they need to overhaul legacy technologies that do not provide the agility required to respond to the needs of the market.”
