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Consumers around the world are accelerating the adoption of digital banking. Both retail and commercial banks are under pressure from consumers and have only a short period to adjust to this new reality or risk becoming obsolete.

For their business models to be sustainable, banks cannot afford to be slow, and they need to be agile when it comes to technology. However, as consumer demands across regions vary, so do digital transformation priorities.

But what are the overarching digital transformation priorities, and barriers to progress, that banks are facing in each region?

The Executive Report

We surveyed 1,000 senior banking executives to identify the global leaders in digital transformation. Download the report for the full story.

Deep Dive: The Digitalization of Commercial Banking

To explore the opportunities and challenges of digital transformation in commercial banking, we asked four senior commercial banking execs for their insights. Get the full report to find out what they said.

How have different regions been impacted by COVID-19?

While banks have made significant progress during the pandemic due to the need to provide digital, remote access to customers, the main barrier to digital transformation worldwide has been the disruption to the workforce caused by COVID-19. Over a third of banks in APAC, EMEA, and North America (NA) ranked this challenge among the top three of the barriers they have faced over the past 12 months.

However, different regions also have additional obstacles to overcome. For example, APAC sees regulatory challenges an equal barrier to COVID-19 (36%), whereas NA and EMEA both rank the lack of operational agility as their second most pressing challenge (30% and 31%, respectively).

Some barriers may be more notably felt in certain regions because their priorities for digital transformation and their drivers for this shift are also different.

For example, 68% of banks in APAC believe customer experience is a key metric at the highest level of their organization. And APAC banks — more than any other region — also believe their organizations have a culture that promotes customer-led innovation for new products and services.

However, APAC’s rapid digitization has made it a target for fraudsters. For example, over 400 OCBC customers in Singapore lost at least $8.5 million in 2021 to a phishing scam. These attacks are impacting banking regulation within the region which could be why regulation is more of a barrier in APAC than other regions.

Digital transformation: What’s next where you are?

Check out our regional infographics for the inside story from banking leaders in your region.

68% of respondents from APAC stated customer experience as a key metric within the highest levels of their organization.

Operational transformation priorities

The priorities for transformation vary globally, with some regions putting greater focus on strategy than others. Two-thirds of banks, especially those in APAC (68%) and EMEA (67%), believe their organization has a clearly articulated strategy in place, whereas in NA this number is just 60%.

Our research shows that banks globally fall into four groups based on their current level of progress in two critical areas of digital innovation: customer experience leadership and operational transformation leadership.

North America

Over the past 12 months, there has been a large decrease in the volume of slow starters (down from 71% to 57%) as banks feel increased pressure to accelerate transformation with the goals of delivering value to clients more quickly and at a lower cost.

Are banks being proactive in their adoption of new technology?

With this increased pressure, more banks are becoming “Transformational Leaders” (up 14% from last year) by adopting a proactive approach to new technologies.

Over half of banks believe they are ahead of direct competitors with product and service offerings that go beyond traditional financial services and capture new and existing customers. However, in NA, this figure drops to 42%.

In NA, it is possible that because fewer banks have a clearly articulated strategy for their transformation, there are fewer who believe they are ahead of their direct competitors. Banks need to look at the big picture and create a business-led, customer-centric approach to transformation, to craft a strategy that has notable business impacts and places them ahead of the competition.

Being proactive in delivering transformation within your bank through creating a defined strategy can help identify the right priorities, business objectives, and technologies that you need to succeed in your regional market.

Transformation is here to stay

The Digitalization of Commercial Banking

To explore the opportunities and challenges of digital transformation in commercial banking, we asked four senior commercial banking execs for their insights. Get the full report to find out what they said.

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