Digitization and Disruptive Technologies Spurring Banks to Invest in New Business Models
Paris (ots/PRNewswire)
Infosys Finacle-Efma Research Shows 78 Percent of Banks Becoming More Customer Centric Through Reimagining Banking Practices
Infosys Finacle (https://www.edgeverve.com/finacle/), part of EdgeVerve Systems, a product subsidiary of Infosys (NYSE: INFY), and Efma (http://www.efma.com/index.php/init/home/index/EN/0/0), a global not-for-profit organization today launched the eighth annual study of 'Innovation in retail banking'. The research revealed that 77 percent of banks regard the threat from technology companies, start-ups, retailers and/or telecom players as high or very high. Over half now consider the threat from technology companies and start-up challenger banks as significant.
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However, the research, in which 158 banks from 56 countries participated, showed that banks have largely embraced digitization and are aggressively adopting new technologies in order to innovate. The proportion of banks with an innovation strategy has increased to 74 percent in 2016, from only 37 percent in 2009. In addition, banks are now more likely to collaborate with start-ups in order to stay competitive, with nearly three quarters (73 percent) seeing them as the best way to leverage new technologies.
Key findings:
- The vast majority (86 percent) of banks believe that emerging competitors will have a significant impact in the payments area - Additionally, 73 percent of banks consider working with innovative start-ups as the best approach to access disruptive technologies. Meanwhile 41 percent are collaborating with start-ups as suppliers, 32 percent are making direct investments into start-ups, and 27 percent are running accelerators and incubators - For half of the banks surveyed, legacy technology environments are the biggest barrier to digital transformation, followed by a lack of unified vision (44 percent) and a lack of skills and expertise (38 percent) - Three quarters (74 percent) of banks now have an innovation strategy in place and more than two-thirds (69 percent) believe they are becoming more innovative; but the proportion of banks increasing innovation investment has fallen to 78 percent from 84 percent last year - The most disruptive new technology for banks is advanced analytics and big data, with 79 percent of banks claiming it is having a significant impact now or will have within in the next two years. This is followed by mobility and wearables (75 percent) and open APIs (69 percent) - A fifth of banks are launching or considering launching a digital only bank as a strategy for dealing with digital transformation - Open API Technology is seen as a major development that will have a high impact on the industry over the next two years, especially with local compliance forcing banks to open their payment systems
Quotes:
Vincent Bastid, CEO, Efma:
"This year's global banking study shows that banks have resolutely turned to start-ups to drive their own digital transformations. However, banks are being held back by old legacy systems and are still divided on where and how much to invest. Banks should think globally and embrace new ways of doing business."
Sanat Rao, Global Head of Infosys Finacle, EdgeVerve:
"Changing customer preferences, rapid evolution of technology and pressures from outside of the traditional banking world are accelerating a major transformation of the banking industry. The confluence of these forces is putting digitization at the center of technology renewal, enabling multi-channel touch-points for superior customer service. From the research findings and customer interactions, it will likely be the development of open API's, AI and blockchain that shall cause the next big change in banking."
Additional Resources:
- Download (http://www.experienceinfosys.com/efma-2016) the full 2016 report - View (http://www.experienceinfosys.com/efma-2016) related infographic, video and other collaterals - Download last year's report: Innovation in Retail Banking 2015 (https://www.efma.com/study/detail/19629)
About Efma
A global non-profit organisation, established in 1971 by banks and insurance companies, Efma facilitates networking between decision-makers. It provides quality insights to help banks and insurance companies make the right decisions to foster innovation and drive their transformation. Over 3,300 brands in 130 countries are Efma members.
Headquarters in Paris. Offices in London, Brussels, Barcelona, Stockholm, Bratislava, Dubai, Mumbai and Singapore. Learn more http://www.efma.com
About EdgeVerve Systems Ltd
EdgeVerve Systems, a wholly owned subsidiary of Infosys, develops innovative software products and offers them on-premise or as cloud-hosted business platforms. Our products help businesses develop deeper connections with stakeholders, power continuous innovation and accelerate growth in the digital world. We power our clients' growth in rapidly evolving areas like banking, digital marketing, interactive commerce, distributive trade, credit servicing, customer service and enterprise buying.
Today EdgeVerve products are used by global corporations across financial services, insurance, retail and CPG, life sciences, manufacturing, and telecom. Finacle, part of the product company EdgeVerve Systems, a subsidiary of Infosys, is a universal banking solution, and the choice of financial institutions across 94 countries and serves over 848 million customers - estimated to be nearly 16.5 percent of the world's adult banked population. Over a billion bank accounts are powered by Finacle globally.
To know more, visit http://www.edgeverve.com
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Certain statements in this press release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2016. These filings are available at http://www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. In addition, please note that the date of this press release is November 2, 2016, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company unless it is required by law.
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