Banks across Asia Pacific are lagging behind the rest of the world when it comes to digitisation, with less than one third of banks in the region describing their digital transformation strategies as advanced or mature according to a new research report from the Financial Times Focus (FT Focus) and SaaS cloud banking platform Mambu titled “Evolve or be extinct”.
The research report which surveyed 500 senior banking executives from around the world, also identified that the risk of failing to transform digitally is well understood, with two in three banks believing they will lose market share in just two years if they don’t speed up their transformation strategies.
Meanwhile, three in five believe they will cease to exist in five to ten years if they don’t change their business models.
The “Evolve or be extinct’ report clearly shows that it is those banks that fail to embrace digitisation that are most at risk of extinction.
Key findings from the report
- One third of APAC banks are concerned that their legacy platforms are holding them back.
- Three in five APAC banks believe they will cease to exist in five-ten years unless they change their business models.
- Less than one third of APAC banks describe their digital transformation strategy as mature or advanced.
- More than half (53%) of global respondents said they are at risk of missing digital transformation targets.
Fortunately, according to the survey, APAC banks are taking steps to catch up to the rest of the world, with plans to increase investment in big data, machine learning and blockchain at significantly higher rates than other regions.
Myles Bertrand
Myles Bertrand, Mambu’s Managing Director APAC said,
“While the strong commitment from APAC banks to increase their investment in new technologies is very positive, banks in the region also need to change the way they approach innovation, and start proactively embracing new partnerships and collaborations.
The ‘ecosystem’ approach has been incredibly successful in other regions, and with half of APAC banks concerned that they lack key internal workforce skills necessary to transform, it will prove very effective here too.”
This research illustrates how the banking industry is diverging on its approach to digital transformation.
While less than one third of APAC banks describe their digital transformation strategy as mature or advanced, there’s an emerging cohort of digital ‘evolvers’ that is bucking this trend and really leading the way.
These ‘evolvers’ are those banks that are making rapid progress on digital transformation because they are focused on data technologies, and are shifting to more progressive thinking with a customer-centric approach.
Positively for the region, APAC banks made up 23 percent of this ‘evolver’ group, despite only forming 19 percent of the study sample.
“These forward-thinking players are setting a blueprint for the rest of the industry to follow while demonstrating the business case for a customer-centric approach,”
added Bertrand.
Globally, more than 80 percent of banking leaders surveyed strongly agreed that replacing outdated mindsets with a progressive social purpose was vital to growth strategy.
What this indicates is that banking is no longer purely about profits; banks that are succeeding in this new age are those putting the customer at the center of their own financial journey, creating a socially sustainable business that is future-ready and customer-centric.
The research report “Evolve or be extinct” by Mambu and FT Focus is available here.
Featured image credits: Edited from Unsplash
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