New Study by Q2 Reveals Innovation Gap for Banks and Credit Unions

Rhea-AI Summary

Q2 Holdings (NYSE: QTWO) has released a report emphasizing the importance of fintech partnerships for banking innovation. Over 60% of financial institutions prioritize these partnerships for growth; however, only 12% can quickly establish them. The study highlights challenges, including data underutilization and a lack of cohesive digital strategies, impacting customer experience. Financial institutions are lagging in delivering timely digital services, with under 30% able to launch new services within six months. These insights underscore the pressing need for banks to strategically navigate the evolving fintech landscape.

Positive

• Over 60% of financial institutions view fintech partnerships as vital for growth.
• The report indicates a growing recognition among banks of the need for digital transformation.

Negative

• Only 12% of banks can quickly establish fintech partnerships.
• Less than 50% of financial institutions effectively personalize customer experiences with aggregated data.
• Only 10% can create a fully mobile-aligned digital experience for all customer segments.
• 40% of account openings still require branch interventions or paper-based processes.
• Less than one-third can deliver new services in six months or less.

The report highlights financial institutions’ growing need for fintech partnerships to accelerate innovation and growth

AUSTIN, Texas--(BUSINESS WIRE)-- Q2 Holdings, Inc. (NYSE: QTWO), a leading provider of digital transformation solutions for banking and lending, today announced the release of its new report on bank innovation and digital evolution. The study reveals that developing partnerships with fintech companies is a top priority for growth and innovation at these banks. According to the report, more than 60 percent of financial institutions see fintech partnerships as key to their growth strategy; however, only 12 percent of the survey respondents said they have fintech partnerships and can add new ones quickly.

The financial services sector faces ongoing disruption. While digital experiences and user expectations have evolved—and continue to transform in fundamental ways— the study reveals that change-averse organizations are lagging. Most financial institutions (FIs) have responded to a degree; embracing some new technology, though rarely forming a comprehensive strategy to direct their digital transformation. At the same time, an array of fintech companies, consumer brands, and banking-adjacent providers have taken advantage of this shift, chipping away at banks’ and credit unions’ customer relationships with low-friction point solutions and platforms.

“This important new research bears out what our team has heard in numerous discussions with financial institutions. Banks and credit unions realize the need to leverage the ever-expanding fintech ecosystem to develop competitive advantages and deliver better customer experiences, but they find themselves challenged to address this imperative strategically and holistically,” said Jonathan Price, EVP of Emerging Businesses and Corporate & Business Development, Q2. “Forward-thinking solutions providers that leverage their insight and expertise to help banks and credit unions seamlessly integrate leading fintech solutions to provide differentiated digital experiences – as Q2 has worked to do with our Innovation Studio platform – will be vital partners in helping these financial institutions fulfill their mission of attracting, retaining and serving customers in the years ahead.”

While fintech partnerships are a top priority for banks and credit unions, the study also points to the challenges they are facing to deliver new innovations and continue their digital evolution:

• Seventy-three percent of the financial institutions surveyed reported that their data is aggregated across all processes and systems, but less than half are using this data to personalize customer experiences.
• Likewise, more than half of banks are providing separate digital experiences for their consumers and business customers, but only 10 percent said they are able to create a digital experience that aligns with each target with full mobile functionality. This negatively impacts small business owners since they are not able to get a single view of their accounts across their personal and business.
• The research revealed that a great deal of account opening (40 percent or more) still requires branch intervention or paper-based processes.
• Less than a third of the financial institutions surveyed say they can deliver new services to market in six months or less.

The full report can be downloaded here.

For more information on how Q2 helps financial institutions innovate, better utilize customer data, and partner with fintechs, please visit: Q2 Innovation Studio

Research Background/Methodology

This research, which was conducted online by Arizent for Q2, surveyed 100 qualified bank professional respondents in May 2022. Over half of the respondents worked within a regional bank. To qualify for this research, respondents had to be director-level or higher to be involved in decisions related to digital banking strategy and/or technology investments. Survey questions addressed overall expectations as well as organizational approaches to leveraging customer data, innovation strategy, and fintech partnerships. This was a blind data collection effort. Q2 was not identified as the sponsor of the research.

ABOUT Q2 HOLDINGS, INC.

Q2 is a financial experience company dedicated to providing digital banking and lending solutions to banks, credit unions, alternative finance, and fintech companies in the U.S. and internationally. With comprehensive end-to-end solution sets, Q2 enables its partners to provide cohesive, secure, data-driven experiences to every account holder – from consumer to small business and corporate. Headquartered in Austin, Texas, Q2 has offices throughout the world and is publicly traded on the NYSE under the stock symbol QTWO. To learn more, please visit Q2.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220906005168/en/

Jean Kondo

Q2 Holdings, Inc.

+1 510.823.4728

Jean.Kondo@Q2.com

Source: Q2 Holdings, Inc.

FAQ

What does the Q2 Holdings report reveal about fintech partnerships?

The report shows that over 60% of financial institutions see fintech partnerships as essential for growth, but only 12% can rapidly form such partnerships.

What challenges do banks face in digital transformation according to the report?

Banks struggle with data utilization, separate digital experiences for consumers and businesses, and lengthy processes for account openings.

How many financial institutions can launch new services quickly?

Less than one-third of financial institutions surveyed can deliver new services to market in six months or less.

What percentage of banks are using customer data effectively?

Less than half of the surveyed financial institutions use aggregated data to personalize customer experiences.