Almost three quarters of all UK banks are expected to eliminate human interaction from their retail banking services within the next decade, a new report has claimed.
According to research by digital innovator Avanade, the move comes as rapidly-evolving customer behaviours and expectations “render traditional banking services obsolete”.
The study found that 63 per cent of senior IT and digital decision makers from across the banking sector recognise that traditional methods of banking are being overtaken by disruptive competition.
What’s more, over half admit they’re already facing greater competition from FinTech start-ups, but say the emergence of the likes of Amazon, Google and Facebook into the banking sector represents the greatest threat to market share and profitability in the long term.
The majority (83 per cent) of those surveyed accepted they are playing catch-up in terms of delivering the innovative and personalised digital experience that customers are demanding.
“European retail banks are well aware of the challenges they need to address in order to reconnect with customers, but their reliance on legacy IT systems, built up over forty years or more, is acting like a lead weight, slowing them down whilst new entrants, both fintech’s and established technology giants, are streaks ahead,” Paul Bowen, banking lead at Avanade Europe, said.
Almost all (94 per cent) respondents from the UK believe that modernising their IT systems would help them keep pace with digital competitors, reducing operational costs and paving the way for future investments designed to give their organisation a competitive advantage.
Bowen added: “Banks must discard their old ways of doing business and invest in technologies which empower their workforce to deliver a more personalised service, and that help build a more seamless engagement with customers across every channel.
“IT modernisation will form the bedrock for the radical new approach banks must take to safeguard their future. Most recognise that to effect genuine change, they will need third party support.”