Complying with regulations is increasingly complex for banks as they continue to face tough fintech competition, according to the World Payments Report.
Capgemini’s World Payments Report states that banks should consider adopting a holistic approach to regulatory compliance as they continue to face market competition from fintech start-ups that are setting higher customer experience benchmarks than banks are reaching.
‘Corporates increasingly expect more digitisation from banks, including support services such as account management, data analytics, compliance tracking, and fraud and detection prevention,’ the report stated.
‘The calls for banks to accelerate their shift toward digitisation; they must foster a more collaborative inter-bank approach.
‘To avoid lagging behind in complying with regulations, banks should find ways to accelerate their efforts in developing a proactive and collaborative compliance mindset.’
The report also suggests that banks could benefit from partnering with fintechs, essentially turning more disrupters into enablers and helping traditional financial services to make much-needed technological shifts.
‘[They should] partner with fintechs to improve and enlarge their value proposition and accelerate their time to the market.
‘Banks have recognised the importance of ‘digital thinking’ and may have already entered into digital transformation projects.’
The report identified regtechs as the way forward – firms which enable bank to automate tactical compliance tasks to reduce operational risk and target compliance through technology.
‘Such technology solutions help firms to automate the compliance tasks and reduce operation risks,’ the report stated.
‘As regulations become more complex and expand their scope, increased use of technology for compliance is expected.’