In order to enhance client experience and guarantee secure and flexible operations, European banks view the migration of their core banking systems to cloud and SaaS as a strategic goal.
Temenos Economist Impact Report: Europe’s Banks Are Challenging the Rivals
16 February 2024, Geneva, Switzerland (CNN) — European banks are retaliating against platform companies, neobanks, and payment providers, according to recent study from Economist Impact, which is funded by Temenos.
A third (36%) of respondents to the research “Challenging the challengers: Europe’s banks face the competition” are creating their own greenfield digital bank or fintech startup, while almost half (43%) are investing in fintech start-ups.
In comparison to their counterparts in other countries, European banks are also moving a larger proportion of their core banking systems to public cloud and SaaS.
In order to stay competitive and safe against more agile rivals, more than a quarter (21%) of European banks view cloud computing as a strategic priority. Seventy-five percent of European bankers believe that generative AI will have a substantial impact on the banking industry. AI is also an important component of their technology investment strategy, especially to assist digital marketing and enhance the customer experience.
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According to the survey, compared to other countries, European banks are more likely to see neobanks as their company’s major competitors over the next five years. Still, European banks believe that the payments space is where new companies will acquire the most market share, therefore payment players and technology suppliers remain front of mind. To rival apps like Wise and Revolut, HSBC has introduced Zing, a new multi-currency payments app.
“Fintechs and neobanks took the lead in using new technologies to provide better customer experiences,” stated Jonathan Birdwell, Global Head of Policy & Insights, Economist Impact. Now, European banks are retaliating, copying the non-traditional businesses’ use of technology to target clients underserved by traditional financial services and to entice current customers with assistance in handling their personal affairs. The competitive landscape is changing, according to Temenos Chief Strategy Officer Kanika Hope.
Europe’s banks are making the most of the opportunity provided by open banking by exploring partnerships with their competitors in order to provide their clients with a greater choice of superior services, while neobanks and fintechs struggle with growth and funding issues. To enhance client experience and guarantee secure and agile operations, they are also investing in technology by utilising cloud-native banking systems and SaaS.
In order to help banks deploy software solutions in as little as 24 hours and drastically lower modernization costs, Temenos, a reputable SaaS provider to 700 banks, recently launched end-to-end SaaS services with over 120 pre-configured products, processes, and 700 APIs for retail, business, and corporate banking. Additionally, Temenos LEAP, a new AI-powered solution that speeds up banks’ adoption of the newest Temenos cloud-native technology, was just unveiled by the business.
Concerning this study:
Temenos commissioned a research from Economist Impact to investigate new developments in the banking sector. A global study of 300 executives in retail, commercial, and private banking from Europe (25%) to North America (23%) to Asia Pacific (18%), the Middle East and Africa (17%), and Latin America (17%) is presented in this research. IT, customer service, finance, marketing and sales, strategy and company development, and general management are just a few of the jobs that respondents carry out.
C-suite executives made up half of the responders. Economist Impact has been conducting this study for seven years. To obtain more insights, the investigation also involved interviews with professionals in the field.
Regarding Temenos
Every day, Temenos (SIX: TEMN) opens doors for more than 1.2 billion people worldwide as the top open platform for composable banking. We assist 3000 institutions in 150+ countries, ranging in size from the biggest to challengers and community banks, in developing new banking services and cutting edge client experiences. With the Temenos open platform, our top-performing clients can achieve cost-to-income ratios half that of the industry and return on equity three times that of the industry average.