Eighty five percent of banks cite implementation of a digital transformation program as a business priority for 2018, according to the EY Global Banking Outlook 2018. Investment in technology to drive efficiency, manage evolving risks and benefit from growth opportunities is seen by banks as critical for sustainable success.
- Addressing cybersecurity threats and enhancing security is the top priority in 2018
- Two-thirds of banks expect to become digitally mature or digital leaders by 2020
Addressing cybersecurity is the top priority for global banks (89%) in 2018, replacing last year’s top priority of managing reputational, conduct and culture risks, which falls to sixth place in this year’s report. Recruiting, developing and retaining key talent (83%) also garners significant attention as banks strive to integrate cyber experts into their organizations amidst a skillset shortage.
The survey of senior executives at 221 institutions across Europe, North America, emerging markets and Asia-Pacific shows that banks are seeking to become digitally mature, completing the transition from regulatory-driven transformation to innovation-led change in order to insulate themselves from future downturns. Respondents indicate that few banks (19%) currently consider themselves as either digitally maturing or a digital leader, but more than half (62%) aspire to be one of the two by 2020.
Other highlights from the survey include:
- 59% of banks surveyed anticipate that their technology investment budgets will rise by more than 10% in 2018.
- For banks that are beginning to invest or increasing their investment in new technologies 44% plan to purchase the technology from a third party, while only 17% plan to acquire an entity to onboard the technology.
- 70% of banks cite strengthening their competitive positioning as a key reason for investing in technology by 2020.
- Enhancing cyber and data security is the number one priority for banks, with 73% of banks planning to invest in technology to mitigate cybersecurity threats.
Savvas Pentaris, Partner and Head of Financial Services at EY Cyprus, says:
“While banks are no longer overwhelmed by regulatory change programs, the years ahead will still be some of the most uncertain. Banks are facing increased competition from existing competitors, new market entrants and cyber threats. Banks must become more integrated with digital through strategic relationships and innovative partners.”