The drive by banks to implement new digital technologies has overtaken regulatory worries as the highest priority for global banking executives, according to new research from the Economist Intelligence Unit.
The EIU survey finds that implementing digital strategies (46%) is now a bigger priority for bank management than responding to regulation (35%).
Regulatory pressure has given way to changes in customer behaviour and the arrival of new competitors as the biggest threats to the sector over the next five years. When asked who those new competitors will be, over one-third (36%) cited technology and e-commerce companies like Amazon and Apple and (21%) pointed to non-financial services firms like traditional retailers, rather than new banks (13%) or payment players like PayPal (12%).
Retail banks are responding to the challenge with a range of customer-centric priorities such as implementing a digital strategy (46%), segmenting customers by product and service levels (40%) and adapting the size and role of the branch network (37%). Banks say they will improve pricing transparency (40%), implement better monitoring and governance (39%) and create simpler products (35%) in response to customer demand.