Nearly half (49%) of retail banks across the globe opine that the fintech revolution would phase out the branch-based banking within five years, according to a study by Temenos.
The study, produced in association with the Economist Intelligence Unit, found that other concerns of the banks include a predicted decrease in the use of cash on the high street by 2020, with fintechs offering majority of payments, and peer-to-peer lending.
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New entrants were cited as a significant threat by 26% of the banks that participated in the survey, changing customer behaviour by 22%, and new technology by 24% of the banks.
Sixty four percent of the banks held the view that these threats will give rise to completely automated branches within five years.
The study has also highlighted that in the face of competition from peer to peer lenders and fintechs, banks are responding by investing in digitisation.
To stay ahead in the changing landscape, recruitment has been prioritised by 35% banks, system integration and compliance by 34%, legacy systems by 31%, and client adoption of digital services by 30% banks.
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By GlobalDataTemenos CEO David Arnott said: "Our study shows that banks have clearly woken up to the threat fintechs pose to their business. Last year we found that regulation and compliance were receding as threats. This year we can see that that trend has accelerated. The banks’ response is to look at ways of beating the fintechs at their own game. This may be partnering or co-operating with service providers, or investing in their own digital platforms."
