Fintechs Can Provide Better Design Capabilities, Improved Customer Experience, Report States
Financial institutions are making fintech partnerships a key priority in 2020, according to new research from Cornerstone Advisors. In What’s Going On In Banking 2020: Outlook for a New Decade, 65 percent of banks and 76 percent of credit unions say these partnerships will be an important part of their business strategies this year.
Among eight areas in which surveyed institutions plan to partner with fintechs, both banks and credit unions ranked new products and payments first and second.
“Banks and credit unions are acknowledging that fintechs often have better design capabilities than what exists at banks or their major industry vendors,” Cornerstone Advisors President and co-founder Steve Williams says in the report. “They see partnering as very much a chance to ‘bolt in’ a better customer experience to their legacy back end in a time frame that can allow them to stay competitive.”
The annual What’s Going On In Banking study explores how senior executives from hundreds of US-based mid-size banks and credit unions are prioritizing their technology initiatives and spending.
Other key findings include:
- Cloud computing and application programming interfaces top of the list of emerging technologies banks plan to deploy in 2020.
- The percentage of credit unions that have deployed machine learning and robotic process automation tools jumped from 3% and 1%, respectively, in 2019 to 9% heading into 2020.
- Digital account opening remains a top focus for new and replacement systems in 2020.
- Enhancing commercial online and mobile banking capabilities are planned by an increasing percentage of institutions in 2020.
- CRM continues its run as a top five technology for addition/replacement.
- The percentage of institutions planning to modify or improve lending systems is up across the board, and the commercial loan origination system is among the top five technologies slated for addition/replacement.
- Underscoring the importance of analytics to banks and credit unions, among the five technologies in the analytics category, three are up for modifications or improvements in 2020.
- Managing fraud continues to be a top priority for FIs, and half plan to enhance their fraud management systems in 2020.
“2020 is likely to be a good year for the banking industry,” said Ron Shevlin, Cornerstone director of research and the report’s author. “The state of the economy is the best it’s been in a long time. Consumers are more confident in borrowing, and their improved credit scores mean they’re more credit-worthy. This scenario has earnings growth written all over it.”