UK banks and FS institutions are experiencing roadblocks where innovation is concerned, yet the majority remain bullish on tech investment for 2022, new research from Yobota has revealed.
The London-based technology company commissioned an independent survey among 261 senior decision-makers within UK-based banks and FS companies. It found that 40% are concerned their business is falling behind competitors where innovation is concerned.
Three quarters (75%) said the more sophisticated use of technology is a critical part of their business’ plan for improving its products and services in 2022, yet half (50%) admitted that the implementation of new tech has been slow over the past year due to their organisation’s reliance on legacy systems.
When quizzed about the roadblocks they face, 55% said they have been held back from trialing new technologies due to a lack of formal guidance from UK regulators. Two thirds (65%) said regulators are not responding quickly enough to new trends, thereby hindering innovation within the sector.
More broadly, Yobota’s research showed that 73% of banks and FS firms feel that financial institutions must start operating more like technology companies if they are to deliver innovative products and services to customers. Further, 60% think neo-banks will one day overtake traditional tier-1 banks, with 59% putting this down to their ability to meet customer needs more effectively.
That said, most (63%) decision-makers agreed that the playing field between traditional banks and fintech companies has become more level over the past 12 months.
Ion Fratiloiu, Head of Commercial at Yobota, 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.”