Commercial banks need a digital reboot – Their customer expansion aspirations depend on it
Commercial banks are at a critical turning point. They must modernize to drive growth or risk diminishing returns with the same large corporate customers that have sustained them for decades. Their best potential for growth is via serving their large business customers better and expanding by targeting the growing small and medium-sized enterprise (SMEs) segment. The path is not through new offerings but through better versions of existing offerings.
HFS Research, in partnership with Infosys, surveyed 150 commercial banking leaders across North America and Europe to better understand how commercial banks are modernizing to drive growth. Banks are exploring how to optimize innovation and technology to serve and interact with their existing customers better and target new customer segments.
- Commercial banks are creating models fit for purpose for their target customer base of SMEs and startups. Sexy new offerings are not the growth mantra for commercial banks. The focus is on executing core offerings well.
- Win clients by improving customer onboarding time through digital—one of the worst pain points for clients is a complex onboarding process. The average onboarding time from our selective survey is 32 days. This overly long onboarding time is mainly attributable to implementation and integration challenges.
- Commercial banks are aligning their investments with offering enhancements to serve existing and targeted customer segments better. Partnerships are the catalyst to unlock value across innovation Horizons, but commercial banks need to be selective in their approach to identifying a strategic partner.
- Respondents indicate a lack of centralized data governance (39%), legacy technology and tech debt (35%), too many or ineffective tech and service provider partners (34%), and overly manual processes (28%) as the top challenges.
This report is part three of a four-part series examining the growing importance of ecosystems in the BFS market through the lens of making practical progress across the innovation Horizons and the savvy use of partners to help drive modernization and create new forms of value.
Download below to read this segment of the report.