A survey by Accenture has revealed that banks should collaborate with digital partners for their growth strategy and success, as the majority of bankers believe that the pace of technology change will continue at unprecedented rate.
Under the global survey of over 300 banking executives, 52% of respondents said they expect to work with new digital partners within their industry over the next two years.
Apart from the existing technology challenges, 85% expect that the pace of technology change will increase rapidly and 83% believe platforms will be the glue that brings organisations together in the digital economy.
Nearly half (46%) of respondents cited that implementation of a platform business model and engaging with digital partners play an important role in their success.
Of the banks that seek to work with new digital partners, 42% expect those alliances to be outside of the banking industry within the next two years.
Accenture senior managing director for banking Alan McIntyre said: "The massive volume of data and existing partnerships that banks already have in place today are assets that banks need to leverage to their advantage in creating new business models.
"Digital optimisation of the traditional bank business model could add five percent to ROEs, but if customers start migrating to new platform-based services outside of the banking sector, increased profitability from a shrinking business will be scant comfort to shareholders."
The report also said that automation and artificial intelligence (AI) will become banks’ essential new co-worker. 86% of respondents agree that the widespread use of AI offers a competitive advantage over cost cutting.
Accenture also found that as banks increase the number of touchpoints with customers, hackers will find it easier for potential access points.
While 84% of respondents agree that trust is the cornerstone of the digital economy, 76% strongly say that they are subject to more risks at present than they are equipped to handle as a digital business.
McIntyre said: "Banks have much work to do to reassure customers that their best interest is top of mind and their data is being handled ethically and securely.
"The first step to securing ‘digital trust‘ is to be transparent and clearly communicate what data is being collected and for what purpose, and then use that data for the primary purpose of offering customers benefits tied to the data being shared."
More than four-fifths (85%) of respondents are of a view that lack of data security and ethical controls may exclude them from taking part in other companies’ digital platforms and larger ecosystems.
