Banks Seize Competitive Edge Using Digital Platforms
ISG's new report highlights the shift of traditional banks towards digital banking platforms to meet consumer demands for quick online services. Over 70% of banks are migrating to cloud-based solutions, enhancing agility and cost-efficiency. The report emphasizes partnerships with fintech startups to leverage Banking-as-a-Service models, improving product offerings. While the technology landscape evolves, banks must modernize strategically to stay competitive.
- Over 70% of banks are migrating to cloud-based solutions, providing greater agility and faster time-to-market.
- Partnerships with fintech startups enhance traditional banks' offerings through Banking-as-a-Service models.
- Most banks are currently keeping their existing legacy infrastructure, delaying full modernization.
Modern, cloud-based and as-a-service technologies help traditional institutions provide fast, online banking experiences, ISG Provider Lens™ report says
The 2022 ISG Provider Lens™ Digital Banking Technology Platforms global report finds consumers increasingly demanding quick, online banking experiences rather than traditional transactions inside bank branches. Cloud-native neobanks were launched to deliver those experiences, while older institutions are catching up by replacing multiple legacy systems with new platforms and services, typically taking a phased approach.
“Traditional banks are taking action to attract new business,” said
Many digital banking platforms are cloud-based, and more than 70 percent of banks are currently moving to the cloud, the report says. Benefits of cloud migration include lower costs, greater agility and faster time to market for new banking products. However, given the high stakes of handling customers’ assets, most banks are migrating the systems that support new accounts and products while keeping their existing business on legacy infrastructure for now.
Some banks are beginning to offset revenue lost to new competitors by working with them, ISG says. By letting financial technology startups connect to their systems via open APIs, banks are taking advantage of modular Banking-as-a-Service (BaaS). While startups help them offer faster deployment and more advanced data analytics for customer support, the banks bring regulatory, compliance and domain expertise.
“Partnerships with cloud-based platform providers are helping banks, especially smaller ones, compete cost-effectively,” said
New technologies are also transforming wealth management services, the report says. Capabilities including AI, machine learning, robotic process automation and trusted digital identification systems are now mandatory, especially for data analytics to support hyper-personalized services.
The report covers many other digital banking trends, including automation of manual tasks to cut costs, the rise of central bank digital currencies and how banks are participating in the growth of buy now, pay later (BNPL) services.
The 2022 ISG Provider Lens™ Digital Banking Technology Platforms global report evaluates the capabilities of 36 providers across three quadrants: Core Banking Platforms (with DBEH), Digital Payment Processing Platforms and Digital Wealth Management Platforms.
The report names Fiserv as a Leader in all three quadrants. It names Finastra, FIS, TCS and Temenos as Leaders in two quadrants each. ACI Worldwide, Adyen,
In addition,
The 2022 ISG Provider Lens™ Digital Banking Technology Platforms report for global is available to subscribers or for one-time purchase on this webpage.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across
A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
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