Product agility for European banks is a priority following open banking

As open banking is implemented across Europe, improving product agility is now a priority for 51% of European banks says EIU report

• Change is driven by changing customer behaviour and demands according to 56% of banking survey respondents
• Survey respondents are primarily focused on opening services to third-party developers (55%) and maintaining own product offerings while becoming an aggregator (55%)

PSD2 and GDPR are making their presence felt in Europe. As a result, European banks are prioritising how their response to changing customer behaviour and demands (56%), new technologies (49%) and regulatory fines (46%) according to a report, written by the Economist Intelligence Unit (EIU) on behalf of the banking software company Temenos.

The report explores the theme: “Whose customer are you? The reality of digital banking in Europe”. This regional report derives from the global report conducted for Temenos by the EIU, and examines in-depth Europe’s retail banking environment. European bankers’ top strategic priorities are developing their digital engagement strategies (cited by 43% of respondents) and improving product agility (51%).

And in this new world of open banking, it is clear that retail banks need to build rich functionality in their apps if they want to avoid becoming only product manufacturers and suppliers of balance and transaction data.

Renée Friedman, the editor of the report from the Economist Intelligence Unit, stated, “European banks need to quickly adjust to the realities of open banking if they are to remain truly competitive. They also need to find ways to better use the data they have amassed.”

Key report highlights:

• Retail banks across Europe are focusing their digital investment on cyber security (81% vs 71% globally) and individual delivery capabilities, such as through internet and mobile channels (53%).
• European retail bankers think the most valuable use for AI will be in customer fraud detection (25%) and improving the using experience through greater customer personalisation capabilities (22%).
• European bankers see the biggest impact coming from payment players (61%) and technology and e-commerce disruptors (35%).
• Respondents expect new entrants to gain the most market share in the payments space (62%) and savings and deposits (43%).