A new survey from Ovum, commissioned by Infosys, reveals that 75 percent of the European banks are still using outdated core banking systems, which is affecting their ability to accelerate growth. The research covered 65 C-level executives across European financial institutions and highlights that the lack of modern core banking systems is impacting the bank's ability to meet changing customer demands quickly, and adapt to regulatory compliance mandates efficiently.
Key research findings include:
Outdated systems a barrier to innovation and compliance
- 80 percent of the banks said that outdated core banking systems were causing them to struggle to bring new products to market quickly
- Three-quarters of the banks face difficulties getting access to timely data, and close to two-thirds feel that existing systems do not support regulatory change
Increasing wallet share within the existing customer base a priority
- 55 percent of banks are focusing on increasing wallet share within the existing client base, with only 20 percent trying to achieve growth through new customer acquisition
- However, providing a unified customer experience across channels is an issue for about half of European banks, impacting their ability to effectively cross-sell.
Business and Information Technology (IT) still walk different paths
- About three-quarters of banks struggle to enact process change led by the business, with IT systems proving a stumbling block rather than an enabler.
- 79 percent of European banks said that the complexity of IT, combined with insufficient expertise within the business, was a major barrier to core system replacement.
Haragopal Mangipudi, Global Head - Finacle™, Infosys, says: "Compliance, innovation and speed to market are crucial for banks to succeed in the current market. Banks across Europe need to take action now if they are to address the issues highlighted in the report and remain competitive. Core banking systems are at the heart of any bank's activity and adoption of modern systems should be reflected in the bank's strategy to stay competitive."
Daniel Mayo, practice leader, financial services technology, Ovum, says: "There is a clear disconnect between market needs and market capabilities when it comes to core banking systems. Many banks are trying to restore revenue and drive growth through better servicing and cross-selling to their existing customer base. While European banks with modern packaged systems have faith that they are equipped to tackle the challenges in the coming years, those using older core banking systems do not."
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