Many established banks are not fully prepared to deal with the revolution of digital technology, a new report has suggested.

Accenture surveyed 25 senior banking executives involved in technology innovation for its Future of Fintech and Banking report.

Some 72 per cent of the respondents felt that their business had a “fragmented or opportunistic” approach to dealing with digital innovation, and 40 per cent thought the time it took their bank to deploy new technology was too slow.

Four out of five said that when it came to skills and culture, their banks were only “somewhat” or “minimally” equipped for the digital age. Although 80 per cent saw working with startups as a valuable way to bring new ideas to their business, 56 per cent claimed that their organisational cultures needed to change in order to work effectively with startups.

All of the respondents believed that legacy technology presented an issue to their organisation. Nearly half claimed that their banks did not invest enough in innovative technologies, but three quarters expected this spending to increase over the next two years.

All of the executives surveyed felt that banks were open to collaboration with their peers and organisations outside of their industry to more effectively adopt innovative technologies. Three fifths believed that banks and new competitors could co-exist by providing differentiated offerings – or that established banks would acquire the new players.

“Banks are starting to realise the full potential of digital technologies and their potential to disrupt and transform the banking industry,” commented Richard Lumb, group chief executive, financial services, Accenture.

“The leaders recognise that digital goes far beyond channel and process innovation – it dissolves industry boundaries and provides opportunities for new business models and competitors, and banks have no choice other than to innovate to remain relevant to their customers. It is encouraging that many are receptive to the idea of open innovation, collaboration and FinTech investment and also are prepared to sacrifice current revenue in order to move to new business models. But banks need to innovate faster, become more nimble and develop a more entrepreneurial culture if they are going to compete effectively and meet customers’ needs.”

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