While Canadians are increasingly banking online and via their smartphones, Canadian bankers fear they lack the IT resources needed to meet consumer demands, according to a new survey of C-suite banking executives.
Commissioned by CenturyLink, which specializes in IT infrastructure consulting and outsourcing, and conducted with IDC, the study found 23 of the 50 banking executives (46%) surveyed believe they lack the “IT infrastructure, systems and processes” to meet customer expectations for mobile banking.
Fully 70% (35 of 50) survey respondents said they either don’t have or need to improve the IT infrastructure to meet customer expectations delivered through digital channels.
In other words, even if bank execs know their customers want to do their banking anytime and anywhere thanks in part to the proliferation of mobile wallet, online and tablet banking applications, those same execs have work to do to give their customers what they want.
A whitepaper expanding upon the findings of the research points out that the financial services game has changed with technology players like Google, Samsung and Apple recently launching their own mobile payment solutions.
“Five of the six big retail banks’ CEOs specifically state, in their respective annual meeting remarks, that the rise of a new class of competitors from the tech industry is a disruptive force. Ensuring that banks have the technology and skills in place to support their mobile solutions is a concern for C-Level financial services executives,” said the paper titled Banks: Customers Expect That You’re Always On And Available, Are You Ready?
“To stay competitive in a technology-driven marketplace, Canadian banks must be both financial institutions and mobile technology innovators,” said Roji Oommen, managing director of financial services at CenturyLink.
Aside from identifying bankers’ feelings of IT inadequacy, the paper highlights other recent research to prove just how much Canadians are shifting to digital and mobile to do their banking.
•Citing comScore research the report points out the most popular websites visited by Canadians are related to personal finance and, as of 2012, more than 6.7 million Canadians pay bills online;
•87% of mobile phone owners used online banking at least once a month, according to IDC;
•54% of those mobile phone owners completed mobile banking transactions; and
•24% of those same consumers used their phone to make a payment via online banking, with a mobile app or at point of sale.
The report also looked south of the border for clues to where Canadian consumer habits could be headed.
•IDC found mobile banking has grown from 23% in 2011 to 47% in 2014.
•Of those who use mobile banking, 30% had security concerns.
And to Asia Pacific where according to a recent McKinsey report:
•Approximately 40% of “Asian mass affluent consumers now prefer online or mobile banking;”
•When it comes to those under 40, the numbers rises to about 50%; and
•There are 670 million digital banking customers in Asia today and that is expected to rise to 1.7 billion by 2020.
CenturyLink suggests to catch up with consumer expectations, Canadian bankers should consider outsourcing. Thirty-nine of the banking executives said customer demand for new digital and mobile services would push them to outsource more. The bank executives were also asked what part of their IT they currently outsource:
• 80% outsource for cybersecurity expertise;
• 62% outsource their infrastructure for scalable mobile applications and services; and
• 40% outsource their public cloud infrastructure.
