Only 11 percent of banking executives expect their financial performance to significantly improve this year, yet 60 percent plan to invest in new customer facing technologies, according to the 2017 EY Global Banking Outlook.
The data comes from a survey of senior executives at almost 300 banks across Europe, the Americas, Africa and Asia-Pacific. The executives identified two priorities for growth in the banking sector: recruiting and retaining talent and investing in new customer-facing technology.
The report shows that while globally, banks are still facing market challenges, executives are looking to investments in technology and partnerships with fintech and blockchain firms to improve profitability. Banks ranked managing reputation risk and meeting regulatory compliance and reporting standards as top overall priorities.
“The key to success will be building a better ecosystem, not a bigger bank. Institutions must look for alternative ways to be organized and to operate; to have a much thinner spine than they have today,” said Karl Meekings, Lead Analyst of EY Global Banking & Capital Markets.
The report outlined a five-step plan for banks to manage risk and promote growth, encouraging banks to reshape and streamline operations and partner with industry disruptors to provide better services and drive out costs.
Earlier this month in a keynote speech at the annual LendIt conference in New York, former Barclays CEO Antony Jenkins predicted a “fundamental re-architecturing” in banking and financial services technology over the next 10 to 20 years, with more international markets emerging. Jenkins warned banks to adopt such things as descriptive ledger, machine learning, cloud technology, artificial intelligence and voice recognition or be “left behind.”