Source: Newsbyte: Six in 10 Global Banks Open to Partnering with Fintech Start-Ups

WALLDORF, Germany, Sept. 15, 2016 /PRNewswire/ — SAP NEWSBYTE — Six in 10 global banks are open to partnering with financial technology firms (fintechs), a survey released today on future proofing banks by SAP SE (NYSE: SAP) revealed. One in three banks (34 percent) are open to a collaboration with a fintech company and one in four (25 percent) would consider an acquisition, the survey, conducted by IDC Financial Insights and sponsored by SAP, found.

The IDC e-book, “The Future-Proof Digital Bank,” surveyed respondents from 265 retail and corporate banks in 24 countries on how they’re driving digital transformation. The study found that while the relationship between banks and fintechs is improving, banks still need to do more to implement key lessons learned from fintechs to achieve full digital transformation (DX). While most banks are quick to report that they are digitally savvy, the study found that most digitally transformative initiatives are still business-led “islands of innovation” only posing as digital transformation, while true business-wide transformation remains rare.

“The relationship between banks and start-ups is an interesting and nuanced one,” said Rob Hetherington, global head of financial services, SAP. “Banks are in the midst of digital transformation, looking for ways to speed their time to market and to deliver new value or services to customers. Start-ups on the other hand are mobile, agile and built solely for the customer, yet they lack the regulatory know-how and customer confidence that large, global banks have. Both have something the other wants, and I anticipate that we’ll witness far greater collaboration, integration and – in some instances – acquisitions happening in the next year.”

Other key findings include:

  • North America puts core focus on DX as a business enabler, with 40 percent of North American banks investing more than a quarter of their IT budget in DX initiatives and 20 percent seeing DX as an organizational strategy.
  • Customer centricity drives investment in EMEA, with 57 percent citing improved customer experience as an outcome of DX and 44 percent of DX initiatives primarily focused on the front office. Less than 25 percent of EMEA banks have a strategic enterprise-wide approach to digital transformation in place.
  • Latin American banks tend to build fragmented initiatives. Twenty-four percent of the DX initiatives are focused on back office (4 percent higher than global average), while at the same time 42 percent of the DX initiatives are focused on the front office.
  • Banks in Asia Pacific are moving towards an advanced strategic approach to DX with 29 percent having implemented an organization-wide DX strategy, higher than the worldwide 28 percent. However, there is less of a focus on improving the customer experience in APAC, with 41 percent citing it as a priority compared to global average of 50 percent.

Jerry Silva, research director for IDC Financial Insights, said: “Digital transformation at any bank always begins with an honest self-evaluation involving many questions that touch upon evolving customer demands, strengths, weaknesses and the competitor landscape. From there banks must then invest in a full DX by building board-level involvement, build a leadership structure for organization-wide transformation and finally build an infrastructure that supports partnerships.”

To see the full report, visit: http://sapworldbanking.idcinteractive.net. For more information, visit the SAP News Center.

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