U.K. Banks Adopt Digital Platforms to Compete With FinTechs
ISG Provider Lens report also sees the COVID-19 pandemic pushing banks in the U.K. toward digital platforms cashless services
Banks in the U.K. are shifting to digital platforms to gain a competitive advantage against the rising FinTech industry, according to a new report published today by Information Services Group , a leading global technology research and advisory firm.
The 2020 ISG Provider Lens Banking Industry Ecosystem Report for the U.K. finds banks in the country interested in cloud-based core banking systems, instant payment technologies, automated anti-money laundering services, and API-led applications. The COVID-19 pandemic has accelerated adoption of digital platforms in the U.K., with both banks and merchants pushing for a cashless society.
Recommended AI News: SimplyBank Selects KlariVis to Lead Its Data Analytics Initiative
“The pandemic has fast-tracked the move in the U.K. toward online transactions,” said Bryn Barlow, ISG partner based in the U.K. and co-leader of the firm’s EMEA BFSI industry practice. “Banks are looking for better coordination between their own platforms and their customers’ digital information and records.”
The report also notes the ongoing exit of the U.K. from the European Union will require banks in the country to decouple their networks, including payment and know-your-customers systems, from the EU. For U.K. banks to become a competitive financial hub outside the EU, they will need to invest in cutting-edge technology and business processes, the report recommends.
In addition, the report notes many U.K. banks are closing branches to fund their digital initiatives. Newer and larger banks have begun offering online-only banking services, resulting in several growth opportunities for technology service providers.
Banks in the U.K. are also focused on retaining customers and attracting new ones through new services driven by technology, the report adds. Many banks are offering easy-to-use treasury management, supply chain and credit products in an effort to compete with FinTechs. While banks in the U.K. have been on the forefront of next-generation payment systems, FinTechs and other new challengers are pushing the boundaries of the payment ecosystem further with API-led service portfolios that include virtual payment cards, instant payment options and loyalty-based credit.
Recommended AI News: OneConnect CEO: Fintech Transformation Now a Driver of Growth in Banking Sector
As a way to increase agility, many U.K. banks are realizing they need to modernize their legacy core banking systems, the report adds.
In addition, banks in the U.K. are looking to artificial intelligence and other new technology tools to improve their know-your-customer and anti-money laundering systems, the report says. A large number of banks are moving toward automated anti-money laundering checks to improve scaling and speed and to reduce false positives. In some cases, service providers are partnering with smaller FinTech companies to develop integrated solutions.
The 2020 ISG Provider Lens Banking Industry Ecosystem Report for the U.K. evaluates the capabilities of 26 providers across four quadrants: Core Banking Platform Implementation Services for Retail, Core Banking Platform Implementation Services for Corporate, Payment Ecosystem Services and Know-Your-Customer/Anti-Money Laundering Services.
The report names Accenture, Infosys and TCS as leaders in all four quadrants and Cognizant as a leader in three. Capgemini is named as a leader in two quadrants, and Atos, FIS, Fiserv and IBM are named as leaders in one.
In addition, Cognizant, LTI, Tech Mahindra and Wipro were named Rising Stars—companies with “promising portfolios” and “high future potential” by ISG’s definition—in one quadrant each.
Recommended AI News: atSpoke Selected by PagerDuty as Its Modern Workplace Operations Platform