The Global State of Digital Transformation in Banking

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.

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.