Digital storm sweeping through banking industry
Digital storm sweeping through banking industry
EY’sGlobal Banking Outlook 2018 shows that 85 per cent of banks name the implementation of a digital transformation programme as a business priority for 2018.
Digital transformation, according to EY’sGlobal Banking Outlook, will see banks pouring resources into investment in technology to drive efficiency, manage evolving risks, and benefit from growth opportunities. Banks see this as critical for sustainable success.
Meanwhile, addressing cybersecurity is the top priority for global banks (89 per cent) in 2018, replacing last year’s managing reputational, conduct, and culture risks, which fell to the sixth place this year. Recruiting, developing, and retaining key talent (83 per cent) also garners significant attention as banks strive to integrate cyber experts into their organisations amidst a skillset shortage.
The report also reveals that banks are seeking to become digitally mature, completing the transition from regulatory-driven transformation to innovation-led change in order to insulate themselves from future downturns. Respondents indicate that few banks (19 per cent) currently consider themselves as either digitally mature or a digital leader, but more than half (62 per cent) aspire to be one of the two by 2020.
Deputy sector leader of EY Global Banking & Capital Markets Jan Bellens said, “In order for banks to weather the performance challenges that lie ahead, they must prepare for a future led by innovation and technology. The pace of innovation continues to accelerate and banks must have a strategy in place to ensure that their implementation of new technology is effective.”
“Ten years after the global financial crisis, banks continue to experience increased competition from a range of new market entrants and evolving risks that challenge their ability to deliver sustainable profitability,” said Duong Nguyen, EY Vietnam partner and leader of Financial Service Organisations and IT Advisory Services.
The survey also found that 59 per cent of banks surveyed anticipated that their technology investment budgets will rise by more than 10 per cent in 2018. For banks that are beginning to invest or increasing their investment in new technologies, 44 per cent plan to purchase the technology from a third party, while only 17 per cent plan to acquire an entity to onboard the technology.
70 per cent of banks, meanwhile, cite strengthening their competitive positioning as a key reason for investing in technology by 2020. Enhancing cyber and data security is the number one priority for banks, with 73 per cent planning to invest in technology to mitigate cybersecurity threats, supporting enhanced cyber and data security as a business priority.
