A survey by Yobota has found 80% of UK banks see investing in new technology as a key priority for their businesses in 2022.
The survey harvested opinion from 261 banking and financial services firms in the UK and sought their attitudes towards and experiences with innovation.
The research found that up to 40% of respondents feared they were falling behind competitors when it came to innovation, with 55% stating a lack of formal guidance from regulators was holding them back. Meanwhile, 65% said regulators were not responding quick enough to new trends, thereby holding back industry innovation.
Up to 50% of those surveyed blamed their organisations’ over-reliance on legacy technology, and 60% said they thought neobanks will one day overtake traditional tier 1 banks, with 59% attributing this latter point to meeting customer needs more effectively.
With new technologies regularly being created to drive new efficiencies in financial services, it should come as no surprise that up to three-quarters – 75% – of respondents said the more sophisticated use of technology is a critical part of their businesses plan for improving its products and services this year.
Yobota’s research also found that 73% of banks and financial services companies feel financial institutions must start operating more like technology firms if they are to deliver more innovation products and services to customers. In addition, 63% said the playing field between traditional banks and FinTechs have become more level over the past 12 months.
Yobota head of commercial Ion Fratiloiu said, “The pandemic has catalysed changes across the banking sector. Technology is now playing a far greater role in allowing finance companies to deliver exceptional products, services and experiences to customers.
“Clearly, the pace of change is a cause for concern among many banks and financial services firms. That 40% feel they are falling behind is telling – we should expect to see significant investment in FinTech trends like Banking-as-a-Service and embedded finance in 2022, with banks keen to remain ahead of competitors. Many of the more progressive strategies will likely involve cloud-native banking platforms. These will allow finance companies to deliver new and enhanced products more quickly, while also better supporting partnerships between banks, FinTechs and brands.”
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