Digital Banking Experience report 2022: banks need to speed up digital transformation

by Régis Roba - Private Sector Belgium Business Unit Director
| minute read

In 2022, banks were struggling to meet the rapidly changing demands and expectations of their customers. In order to keep pace with today’s hyperconnected consumers, banks need to improve their digital maturity. This requires them to accelerate and not merely consolidate their digital transformation.

This is one of the main takeaways from this year’s Digital Banking Experience (DBX) report. The results of that report were revealed by Sopra Steria, who commissioned it, at the 2022 Sopra Banking Summit, a week-long annual festival of fintech.

For the second year in a row, the Digital Banking Experience report assessed the digital maturity of today’s banks and their ability to keep pace with their customers' latest expectations. The research is based on a cross-analysis of banks' perceptions (792 banking sector decision-makers surveyed by Forrester in 50 countries) and consumers' perceptions (12,500 customers surveyed by Ipsos in 14 countries).

In a previous post, I have already taken a closer look at today’s consumers’ views on banking. I will do the same now for the views of the bankers themselves.

Major challenges for 2023

Following on from 2021, banks have been facing accelerating change in 2022. They have been under pressure, trying to consolidate their digital transformation in a difficult macroeconomic context. Our report highlights the obstacles in their path toward digital maturity, as well as the banks’ confidence in their ability to overcome these obstacles. Among the major challenges for 2023, we have identified the ability to collaborate with their financial services ecosystem, the agility in their organisations and processes, and the unstable balance between their operational resilience and innovation capacity.

Resilience versus innovation

Given the new expectations of today’s hyperconnected consumers, it should come as no surprise that banks of all sizes, segments, and geographies are encountering obstacles in their digital transformation. Between 2021 and 2022, the proportion of banks that fall into the lowest category in terms of digital maturity rose by a third (32%).

This is disproportionately the case for small- and medium-sized banks. They have decreased their investment in service and payment innovations, preferring instead to prioritize short-term actions, such as shoring up their resilience by protecting their IT systems (39%) and improving their productivity and efficiency.

Collaboration with ecosystems

The banks that are the furthest along in their digital transformation are almost unanimous on the measures to take to speed up their transition, with 94% of them believing that the Software-as-a-Service (SaaS) model will become the main mode of deployment in the future. Meanwhile, 95% of these same banks will rely on collaborative business models.

Collaboration with ecosystems is also a central concern for the sector as a whole. However, while 59% of banks say they have made investments in this area, only 19% say they are ready for Open Finance: the next step beyond Open Banking, enabling access and sharing of consumer data to even more financial products and services, not just banking.

The biggest challenges in this area remain the interoperability of internal and external systems and data, as well as security requirements. To facilitate exchanges and promote their services on third-party platforms, a third (33%) of the most advanced banks will make it easier to use their APIs in an integrated finance approach. A large majority of them (83%) will also significantly increase their investments in emerging technologies.

Leverage trust capital

Fortunately, to overcome all the challenges and obstacles hindering their digital maturity, banks can also continue to depend on the trust capital they have gained with their customers over the years, thanks to their known position in the market, long-standing reputations and familiarity/expertise with a heavily regulated industry. One of the major talking points in the coming years will be how banks can leverage this trust toward improving the customer experience for new and old customers alike.

Of course, banks could – and should – use their position of trust to improve on hyper-personalized products and services. Key areas that would be of particular value to consumers are tools that help with financial wellbeing. According to our study, improving the financial savviness of customers is the sixth-highest ranked priority among banks. And almost all are planning on investing in it over the next twelve months.

Going beyond 2022, banks will need to use this very high reserve of trust to maintain existing revenue streams and create new ones, all the while fending off competition from industry entrants. To face the future, banks must rethink how they work, focusing on opening up real opportunities to stand out and create value by offering adapted services that can be accessed from service platforms.

Need (extra) help in taking on these challenges? Drawing from over 40 years of experience in the banking industry, our expert teams are well equipped to assist and support you in your digital transition. Just contact me or one of my colleagues.