In the fast-evolving landscape of the banking industry, North American banks are strategically repositioning themselves to harness the power of disruptive technologies. A recent Economist Impact study, commissioned by Temenos, sheds light on this transformative journey in the report titled “Can Disruptive Technologies Bolster the Competitiveness of North American Banks?” This seismic shift signifies a departure from the traditional stance of North American banks, positioning them to embrace modern technology, a domain where they historically lagged behind their global counterparts.
Key Findings from the Economist Impact Study:
Technology’s Pervasive Impact:
- A staggering 90% of North American banks believe that technology will wield the most significant influence on their industry in the next five years. This heightened awareness reflects a strategic response to compete with fintechs, non-financial companies, and an aspiration to expand their customer base—a notable increase compared to the global figure of 63%.
Cloud Migration Priority:
- North American banks are leading the charge in prioritizing the migration of domestic core banking to the cloud, with 36% actively pursuing this, surpassing the global average of 26%. Furthermore, 79% of North American respondents anticipate a multi-cloud strategy becoming a regulatory prerequisite in the next five years, outpacing Europe’s 60%.
- A significant 24% of North American banks are concentrating their technology investments on DevOps, exceeding the global average of 18%. This strategic focus accelerates changes to core systems and back-office processes.
AI for Fraud Detection:
- North American banks view AI as a powerful tool for customer fraud detection, with a reported figure of 20%, outpacing Europe (11%) and the global average (13%).
Collaboration and Innovation:
- Collaboration with fintechs and technology providers is deemed essential for maintaining agility and competitiveness. The study reveals that 40% of North American banks are engaging in sandboxes with fintech and technology providers, outpacing the global average of 32%.
Strands’ Role in Transforming North American Banking:
Building on the momentum of this industry-wide shift, Strands, in strategic collaboration with Amazon Web Services (AWS), stands as a pivotal player in aiding North American banks in their technology transformation.
- Strands, in collaboration with AWS and leveraging all the benefits of cloud-hosted infrastructures, provides technologically advanced and highly secure cloud-based solutions. The cutting-edge Strands as a Service (SaaS) platform offers a robust infrastructure for migrating core banking systems to the cloud, enhancing scalability, flexibility, security and operational efficiency.
Data Analytics Expertise:
- Leveraging Strands’ expertise in financial management for both retail and business segments, North American banks gain access to advanced data analytics tools within the Strands SaaS platform. These tools empower banks to derive valuable insights, supporting informed decision-making, enhancing customer experience, and providing personalized financial advice while implementing effective sales strategy.
AI and Machine Learning Capabilities:
- Strands, with a focus on personal financial management and business financial management, leverages AI and machine learning technologies. This empowers North American banks to deploy advanced solutions for propensity forecasting, customer segmentation, customer engagement, and personalized services. The collaboration with AWS enhances the capabilities of AI and ML applications within the Strands platform as well as the exploitation of new use cases enabled by Generative AI.
- Strands as a Service allows banks to pursue effective DevOps-related strategies and investments, streamlining the integration with existing systems. Strands, collaborating with AWS, fosters opportunities forDevOps optimization, assisting North American banks in accelerating changes to core systems and back-office processes.
In the dynamic landscape of North American banking, the confluence of insights from the Economist Impact study and the transformative solutions provided by Strands heralds a new era. North American banks are not only recognizing the imperative of technology adoption but are actively leveraging innovative solutions to modernize infrastructure, enhance security, and personalize customer experiences. As the industry undergoes this paradigm shift, Strands emerges as a key ally in steering North American banks towards a technologically advanced and competitive future.
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