The competitive threat to banks from robo-advisors and other technology continues to grow, yet most bankers, 54%, and financial technology leaders, 59%, say banks are not taking steps to meet the challenge, a recent survey finds.
Furthermore, 90% of bankers anticipate that fintech firms will have “a significant impact” on the industry, and nearly 33% say fintech firms will likely win an equal or dominant share of the market.
In light of such concerns, what’s holding the banks back when it comes to tech innovation?
Nearly one-half of the 100 global banking executives surveyed by the Economist Intelligence Unit — part of the company that publishes The Economist — say these organizations lack a “clear strategic vision of their digital future.” Roughly 40% point to security risks and cultural factors that inhibit change. (The study, “The Disruption of Banking,” was sponsored by Hewlett-Packard.)
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Combining the banking and technology could prove to be the best way to meet the competitive challenges facing the sector, according to 45% of bankers and 53% of the 100 global Fintech executives polled, most of whom say that acquisitions or partnerships are the best routes forward for both segments.
“If I were a betting person, I’d say that some really smart banks are going to survive by merging with some really smart fintechs,” said Phil Heasley, CEO of ACI Worldwide, an electronic-payment provider, in the study.