The banking industry is accelerating digital adoption

During the pandemic, banks have undergone a rapid digital adoption process, with 89% increasing their technology implementation by up to five years.

Research by analytics firm SAS shows that traditional banks have overseen a marked increase in the adoption of new technologies, with 93% accelerating their digital adoption, compared to 87% of challenger banks.

However, priorities differ when it comes to how traditional banks and challengers use the technology. For example, 65% of challenger banks consider offering a more personalized service to their customers as a key differentiator, compared to only 53% of traditional banks. Meanwhile, an additional 65% of challenger banks see being data-driven as a competitive advantage, compared to 33% of traditional banks.

Additionally, 53% of traditional banks recognize the use of artificial intelligence and machine learning as areas where they can gain a competitive advantage, compared to 39% of challenger banks. Added to this is the fact that 83% of all respondents agree that investing in data analytics over the next three to five years would be significant.

Johnny Steele, Head of Banking Services at SAS UK and Ireland, says:

While traditional and challenger banks have rapidly accelerated their adoption of technology during the pandemic, their priorities remain broadly the same. Essentially, as things stand, they will use new technology to double their pre-existing competitive advantages.

However, it is an opportunity for banks to innovate differently. Traditional banks, for example, can use their significant resources to provide a wide portfolio of services to their customers, since 13% of them already give priority. At the same time, however, with advanced cloud-based analytics, traditional banks can ensure that these new services, and those they already offer, are deeply personalized and easy to use. This means being able to complete banking processes almost entirely online, without having to visit a branch or speak to someone on the phone. This is increasingly what customers are asking of their bank. Thus, whether they are challenger or traditional banks, it is crucial that they can offer a fluid, fairer and simpler service for their customers.

Banks will increasingly need to manage data workloads through the cloud to take full advantage of the technologies they have adopted. However, 61% cite security and compliance issues as a major barrier to cloud adoption. Meanwhile, 87% of traditional banks say integrating legacy systems is the biggest hurdle.

You can find out more in the full report, available on the SAS website.

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