SAP: Banks moving too slowly in embracing new technology
Banks remain largely focused on short-term success and move at a very slow pace in adopting new technologies for financial transactions.
Despite increased regulatory pressures for banks to update their IT infrastructure, banks remain largely focused on short-term success and are moving at a very slow pace in adopting new technologies for financial transactions, according to a report published by SAP.
The study uncovered various trends in banking, most notably a large disconnect between regulators’ expectations and the ability of banks to meet compliance and reporting requirements.
While technology is changing every aspect of banking operations, 77% of participants said the greatest impact would be on customer satisfaction and regulatory compliance.
However, many banks said they plan to raise their budget for IT to invest in the necessary banking solutions to meet these changing requirements.
The study also provided detailed insights into the technology areas considered as most important for the industry. Over 65% said mobile is the most important trend for the future, followed by in-memory computing (48%) and cloud (47%).
Respondents also recognised the opportunity in Big Data and analytics in banking and placed a much greater emphasis on the overall comprehensiveness of information.
The top two priorities in platform features noted are completeness of aggregation and the availability of real-time information.
Throughout the study, a clear consensus prevailed that regulatory requirements are the primary driver of business model changes.
Regulators, according to the study, agreed that required levels of risk reporting in banks cannot be met given existing IT infrastructure.
However, some regulators were of the opinion that banks are moving too slowly.
The report said that in order to implement customer-centric banking offerings to deliver better services, institutions will need to enhance their back office support systems to ensure customers experience the same quality standard through traditional or new communication channels.
SAP conducted the study in collaboration with the Frankfurt School of Finance & Management, New York University’s Stern School of Business and Management, the University of Applied Sciences and Arts North-Western Switzerland, and the Business Transformation Academy (Basel, Switzerland).