UK retail banks need to embrace IT-driven change to keep pace with global competition as convergance and consolidation...
in banking continues in the years ahead.
In particular, the development of the single European payment area (Sepa) will create new cross-border opportunities, making pan-European acquisitions involving
The warning was issued by analyst group Gartner at a recent financial services IT conference in
And Sue Landry, Gartner’s managing vice-president for the banking sector, said that only a small minority of banks were sufficiently prepared to drive the necessary change.
“There is evidence that only a very few banks understand the scale of the challenge”, she said.
“These are the change agents, but the other 95% are still too absorbed in milking the current cash cow and meeting short-term obligations to shareholders or private owners.”
Landry said there was more commitment to making necessary infrastructure change than previously, but not enough banks were investing in innovation.
According to a Gartner survey, 46% of bank CIOs globally believe that their companies are pursuing a ‘breakaway’ strategy, investing more in technologies that support business effectiveness that their competitors.
“There is just not enough market opportunity for 46% of banks to be successful in a ‘breakaway’ strategy. In saturated markets, market share gain enjoyed by one bank reflects a loss for others. And this doesn’t include any of the threats from non-traditional competitors,” said Landry.
The same survey found that bank CIOs do expect to focus more on global competition in the next three years, but Gartner said European banks should be ready to grasp opportunities as far afield as Asia-Pacific.
“In Asia-Pacific, IT teams need scaleable architectures and the ability to roll out new banking services at short notice as their management aims for global expansion,” it said.