Global banks are shifting priorities to digitisation, innovation and growth, citing cybersecurity as a major priority in 2018.
According to the EY Global Banking Outlook 2018 released to BusinessDay, 85 percent of banks cite implementation of a digital transformation program as a business priority for 2018.
The banks tap investment in technology to drive efficiency and management of evolving risks as critical ingredients for sustainable success.
Eighty-nine percent of these banks say addressing cybersecurity is their top priority this year, replacing last year’s top priority of managing reputational, conduct and culture risks, which falls to sixth place in this year’s report.
Recruiting, developing and retaining key talents (83 percent) also garner significant attention as banks strive to integrate cyber experts into their organisations amidst a skillset shortage.
The survey of senior executives at 221 institutions across Africa, Europe, North America and Asia-Pacific shows that banks are seeking to become digitally mature, completing the transition from regulatory-driven transformation to innovation-led change in order to insulate themselves from future downturns. Respondents indicate that few banks (19 percent) currently consider themselves as either digitally maturing or a digital leader, but more than half (62 percent) aspire to be one of the two by 2020.
Dayo Babatunde, EY Nigeria Financial Services Sector leader, says:
“In order for banks to weather the performance challenges that lie ahead, they must prepare for a future led by innovation and technology. The pace of innovation continues to accelerate, and banks must have a strategy in place to ensure their implementation of new technology is effective.”
The survey shows that 59 percent of banks anticipate that their technology investment budgets will rise by more than 10 percent in 2018.
For banks that are beginning to invest or increasing their investment in new technologies, 44 percent plan to purchase the technology from a third party, while only 17 percent plan to acquire an entity to onboard the technology.
Also, 70 percent of banks cite strengthening their competitive positioning as a key reason for investing in technology by 2020.
Ben Afudego, EY Partner, West Africa advisory leader, says:
“Ten years after the global financial crisis, banks continue to experience increased competition from a range of new market entrants and evolving risks that challenge their ability to deliver sustainable profitability. To perform at the highest level, institutions must emerge from an era of regulatory driven transformation and develop strategies to tackle the new evolving risks that are preoccupying the C-suite.”
EY is a global leader in assurance, tax, transaction and advisory services.
For this report, 221 banking professionals across the global were surveyed between November and December of 2017 to provide a review of banks’ reported financial performance, strategic priorities and technology adoption over the next 12 to 36 months. The respondents came from 29 different markets. Of the banking professionals surveyed globally, 33 percent were from Europe, 10 percent from North America, 13 percent from Asia-Pacific developed, 19 percent from Asia-Pacific emerging and 25 percent from Nigeria and other emerging economies.