Banks and digitization: a path necessary for competitiveness

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According to a research by Avanade, Italian banks, chased by startups and players like Amazon and Google, are aiming to regain ground through digital services. We talked about it with Monica Vetrò, FSI Lead of Avanade Italia

While customer behavior and expectations are evolving rapidly, Italian banks have embarked on a path of renewal of their traditional services to meet public expectations. On the path to digitalization, however, there are still some obstacles, which in fact slow down the transition to digital.

This is what emerges from the research conducted by Vanson Bourne and commissioned by Avanade, a joint venture between Accenture and Microsoft. The survey involved 280 business decision makers from the IT and digital areas of retail and commercial banking organizations worldwide; 160 respondents come from European banks, 25 of which are Italian. For the research, companies with turnover exceeding 100 million dollars and more than 100 employees were called upon.

The managers interviewed are unanimous in affirming that traditional banking methods are going to be overcome by a disruptive competition both by fintech startups and by digital giants such as Amazon, Google and Facebook.

“The research we have commissioned to Vanson Bourne clearly shows how the banking sector is concerned about the growing competition deriving both from the digital transformation and from the entry on the market of players outside its own sphere which, being more agile and less subject to regulation, threaten the market share and the profitability of traditional banks”, explains Monica Vetrò, FSI Lead of Avanade Italia. “These outsiders are quicker to devise new ways to serve and contact customers, while traditional retail banks are blocked by a strong status-quo and legacy systems. As consumers, we are the object of this competitive context. Traditional banks and new players have put our customer experience at the center; therefore, the greater the opportunity for us to find the experience that best meets our expectations and that is closer to our digital behaviors “.

According to the survey, in Italy more than two thirds of respondents (68%) are trying to catch up on personalized and innovative digital services. Almost all (92%) agree that in order to remain competitive, their organization must increase its investment in the interaction between banks and customers. Among the actions to be taken are the improvements in the customization of customer services (80%), the offer of a unique and multi-channel experience (48%) and the closure of some or all branches to decisively aim at digital (12%)

Despite these statements, many banks have recently increased their digital service-oriented account fees, even by accepting to lose some of their current clientele. “Traditional banks to thrive, but also simply to survive, must adapt quickly to market changes. Most of the decision-makers interviewed indicate the need to react, as these epochal changes driven by technology are already implemented by the competition and also used by customers,” commented Vetrò. “However, being constrained by spending and maintaining systems, most traditional banks are not able to channel investments and resources into more innovative initiatives to help their organization compete.”

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