New Economist Impact Report on Digital Competition in Global Finance Commissioned by WSO2

As nearly half of banking executives report serving customers via digital channels to a large or great extent, signs point to increasing recognition of fintechs as partners

London, UK – 11th May 2022 – In a global survey of 300 C-suite banking industry executives, 54% say their financial institutions have faced greater competition over the past three years from digital alternatives while 47% of UK respondents found this to be the case. However, these executives also indicate that they are better positioned to compete. Notably, 85% of respondents reported that they have, to some extent or more, the necessary technological tools to create new digital products and services. This rises to 90% for UK respondents. The survey was conducted for a new report[1] from Economist Impact[1], “Threat assessment 2022: digital competition in global finance,” which was commissioned by WSO2, a leader in digital transformation technology.

In addition to reviewing the competitive landscape, the report examines how banking institutions are addressing cultural change, embracing digital skills, and relying on technology to achieve a competitive advantage. The full report is available here: http://impact-competitioninglobalfinance.econ-asia.com/projects/digital-competition-in-global-finance/?utm_source=pr&utm_medium=pr&utm_campaign=pr_economist_banking_220511

Banks Rise to the Digital Competition Challenge

Many of the banking firms have responded to the competition by investing in their digital presence. Among survey respondents, 47% say they are serving customers via digital channels, including online or mobile applications, to a large or great extent (43% for UK respondents), and 77% of these executives predict their organisation will serve customers via digital channels to a large or great extent over the next two years (80% for UK respondents).

“All signs in the Economist Impact report point to established financial institutions successfully rising to the digital challenge,” said Eric Newcomer, WSO2 chief technology officer. “A majority of survey respondents say they have the necessary tools, are culturally ready, and have the talent needed to create new digital products and services, which to me represents significant change in the industry dynamic.”

At the same time, the growth of new digital entrants in the banking sector is shifting views on who is a competitor versus a potential partner. Among executives surveyed, 26% identified increasing competition from banking as a service (BaaS) or embedded finance, such as from non-financial firms including technology companies, and telecoms providers, among others. Whereas 43% of those UK respondents who had identified increasing competition stated that this was down to cybersecurity concerns or challenges including customer trust.

Meanwhile, only 12% of survey respondents listed increasing competition from financial technology (fintech) companies, dropping to 7% for UK respondents—in stark contrast to the widespread fear of competition from fintechs just a few years ago. Notably, the Economist Impact report cites a 2021 report[2] from banking consultancy Cornerstone Advisors, which found that 48% of banks surveyed had partnered with fintech startups over the past three years.

“The intense competition facing banks is leading to unprecedented digital collaboration,” said Seshika Fernando, WSO2 vice president of banking and financial services. “Banks once jealously guarded their data on proprietary systems to grow their customers and revenue share. Today, they are accelerating their growth by partnering with fintechs to add new services, embedding banking-as-a-service solutions in online retail offerings, and tapping the insights of agencies with big data expertise.”

[1] Economist Impact, “Threat assessment 2022: digital competition in global finance,” by Kim Andreasson with Michael Frank, May 2022

[2] Cornerstone Advisors, What’s Going on in Banking 2021: Rebounding from the Pandemic, January 26 2021

Editor

Lisa Baker is the Editor of International Business News. As the Owner of Need to See IT Publishing, Lisa is an experienced business and technology journalist and publisher.

Cloud Migration Finance and Banking Hyperconvergence News

Nutanix Study Shows Financial Services Organisations are in Early Phases of Multicloud Adoption

Nutanix today released  the financial services findings of its global 2022 Enterprise Cloud Index (ECI) survey and research report, which measures enterprise progress with cloud adoption in the industry. The research showed that fewer financial services organisations have adopted multicloud than any other industry surveyed, trailing the global average by 10%. However, adoption is expected […]

Read More
Cybersecurity News Tech Thought Leadership

Building Your Cyber Threat Intelligence Practice: Evolving from Basic to Business-critical Asset

Written by Yann Le Borgne, Vice President of International Threat Intelligence Engineering, ThreatQuotient Before a business can successfully defend its assets against frequent cyber attacks that are endemic in modern commerce, it needs to know where the threats are coming from and what form they take. This is the basic aim behind building a cyber […]

Read More
News Recruitment Tech Talent

hackajob launches in the U.S as demand for tech talent soars

Market leading tech recruitment platform hackajob launches in the U.S as tech employment set to reach 8.9 million in 2022[1] U.S launch comes as the rise of remote working sees 67% of tech talent widen their job search beyond their locality Leading UK-based tech recruitment platform hackajob launches today in the U.S. hackajob’s goal to […]

Read More