As the banking space continues to evolve, financial institutions are finding that companies they previously considered rivals may be potential partners. 

In a survey of 792 bank decision-makers in 50 countries conducted by France-based Sopra Banking Software, 77% of senior banking executives said they “feel pressured” to partner with fintechs to stay relevant in the banking space, according to the “Digital Banking Experience 2022” report published today. 

Banks’ shifting mindsets 

Seventy-six percent of responding banking execs said they cannot meet their customers’ expectations on their own, according to the report, which also found:

• 74% view new fintechs and third-party vendors as threats to their existence; 
• 66% say the driver to work with third-party vendors is due to environmental legislation; 
• 65% would prefer to partner with third parties rather than build their own tech; and 
• 49% believe they lack the operating model needed to digitally transform on their own. 

“While it may take banks more time to fully commit to the idea of fintechs as collaborators instead of the competitors they’ve seen them as for years, our report indicates that banks are slowly opening themselves up to working together,” Sopra Chief Executive Eric Bierry told Bank Automation News. “For banks, the opportunities of partnering with fintechs outweigh the threats.” 

This week, for example, FinWise Bank selected core provider Finastra to update the bank’s infrastructure and improve customer experience. 

In addition, 52% of banks responded that they offer their capabilities to third parties to enable new revenue streams and 74% said the “as-a-service” approach will most likely become the predominant business model of the future, according to the report. 

Meeting digital customer expectations

The report also included survey results from 12,500 banking customers in 14 countries regarding expectations for their financial institutions.  

Of the banking customers surveyed: 

• 67% are interested in AI-powered assistance services;  
• 29% are unhappy with their bank’s ability to listen to them through digital channels; and 
• 26% are satisfied with their bank’s level of personalization offered through digital tools. 

“Consumers expect personalization from their bank, and with so many banking options now available to them, they’ll be quick to leave if banks don’t deliver,” Bierry told BAN. “Banks need to make digital personalization a priority — or they risk losing market share to competitors that already have.” 

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