Recent research from Fenergo reveals that banks’ C-suite executives overwhelmingly agree: Underinvestment in technology negatively impacts client onboarding and retention – yet a large percentage have not invested in solutions that would help. Fenergo’s Greg Watson examines the disconnect.
The rise of fintech and regtech startups has opened up new possibilities for the finance industry, shaking up traditional ways of thinking and completely reshaping financial services as we know it. New technologies, such as big data analytics and artificial intelligence (AI) can completely transform financial institutions, increasing efficiencies and improving client life cycle management (CLM).
However, not all banks are getting on board. A recent survey showed that legacy infrastructure is preventing one in five banks from investing in new, disruptive technologies. Many banks are feeling left behind in the midst of technological innovation. The lack of investment in new technology, coupled with maturing infrastructures, creates barriers to digital transformation. Instead, banks end up stuck with old, manual processes, which negatively impacts operational efficiency, client experience and, perhaps most urgently, a bank’s regulatory compliance positioning. And it negatively impacts the bottom line too; banks can end up spending 80 percent of their budgets on maintaining and upgrading legacy technology solutions.
The same study also showed that 33 percent of those surveyed have not invested in any technology to improve client onboarding at all, despite almost every single respondent (99 percent) agreeing that underinvestment in technology directly impacts client onboarding and retention.