Majority of Banks Fall Behind in Digital Transformation
Nearly one in six banks admit to lagging behind or working to catch up with digital transformation
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- Written by Banking Exchange staff
US banks face challenges in digital innovation, with fewer than one in 10 bank leaders considering their organization to be at the leading edge of digital transformation, according to Gresham.
The report, US Banks’ Data Transformation Journeys at a Crossroads, revealed 18% of banks admitted they were “lagging behind” and 44% were “working to catch up” on digital transformation.
Leaders identified the primary reasons for not being at the forefront of digital transformation as the reliance on outdated legacy systems and the impact of regulatory changes on operational efficiency.
To enhance digital innovation, 23% of respondents identified incorporating AI or automation as the most important system change for transformation.
Julian Trostinsky, global director of solutions engineering at Gresham, said: “Banks falling behind industry peers and new disruptors in their industry inevitably leads to a loss of revenue and market share.
“Time and time again, we are confronted with evidence that the banking sector is awash with manual repair-and-fix processes that could obviously and easily be automated.”
The report also found that the lack of digital and data transformation has caused banks to struggle with meeting regulatory requirements and consumer expectations.
Over half (51%) of respondents stated their organization was not highly effective at complying with regulations for complete, accurate and timely reporting for reconciliation.
Meanwhile, 61% of banks believed their processes for transferring information to regulators were ineffective.
As a result, banks are more likely to face fines due to their inadequate data management as 68% of banks are susceptible to penalties at least once a year due to poor data quality within their firm.
Jenn McMackin, global director of customer success at Gresham, said: “What’s extremely significant about this data is that regulators are outpacing banks by thinking innovatively about data management.”
Tagged under The Economy, Technology, Feature, Financial Trends, Feature3, Digital, Bank Performance,
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