Are Australian banks ‘digitally immature’?
Despite its reputation as one of the most technologically advanced financial services markets in the world, Australian banks see themselves as neither digitally mature nor digital leaders, according to EY’s Global Banking Outlook 2018.
Where one in five surveyed banks around the world rate themselves either digitally mature or a digital leader, not one Australian bank deemed themselves worthy of this distinction.
According to Tim Dring, EY Oceania banking and capital markets leader, however, Australian banks have set their bar considerably higher than their global counterparts in assessing their own digital credentials.
“Australian banks are likely to be benchmarking themselves against emerging competitors and online leaders in other industries, who have more digitally-focused business models and less legacy technology systems to navigate,” he said.
By comparison, Dring added, banks in other markets often compare themselves against more traditional competitors with less digital nous, particularly in the US market where cheques remain prevalent.
A significant majority of local banks, nevertheless, showed some urgency in embracing digitisation, with nearly two-thirds of surveyed Australian banking executives expressing their desire to reach digital maturity by 2020 (on par with the global average of 62 per cent).
Moreover, 80 per cent of Australian banks cite implementation of a digital transformation program as a business priority for 2018.
“With the pace of technological change and the speed at which new innovations are hitting the market, it’s not surprising that banks are increasingly focusing on their digital agendas, Dring said.
“Australian banks have already made significant progress in this space, and we are already seeing them make significant advancements in areas such as mobile payments platforms, fraud protection, biometric authentication, and the use of robotics process automation.”
To drive these digital-centric agendas, local banks also appear keen to pursue more collaboration with the non-banking sector.
“Eighty percent of Australian banks surveyed also stated they are looking to set up new partnerships or joint ventures in both core and new strategic markets in 2018. So we are likely to see even greater collaboration between traditional financial institutions and e-commerce and other technology platform players, particularly as the open banking reforms progress,” Dring said.
Cybersecurity has also assumed a greater urgency within the industry, rating as the number one priority for banks globally. According to the survey, 73 per cent of banks are set to invest in technology to mitigate cybersecurity threats.
The EY Global Banking Outlook 2018 surveyed 221 senior banking executives from the around the world, including the US, the EU, the UK, and the APAC region.