Digitalizing Technology in the European Financial Sector
Banks have continued to find new ways to meet the needs of their clients and give them a positive user experience by streamlining many banking procedures. Banks consistently incorporate new technology and integrate new tools to improve the services they offer to both private and business clients. Technology takes an ever-increasing cut out of the corporate and wholesale banking budget and by 2020 most banks expect to have incorporated digital technology into their systems.
Current Digital Technology in European Banks
Today we can see the word “digital” popping up in every aspect of banking including numerous times in the annual reports of Europe’s top banks and in recruitment adverts. Innovative business models and start-ups are operating in Europe’s financial industry giving the customer more choices; providing solutions; boosting competition and sparking the banking technology race. These new businesses have transformed the financial ecosystem in Europe opening up new options in payments; lending and risk management. There are currently over 1,500 start-ups working in the European financial sector and thousands more worldwide. In 2017 FinTech investments reached €27 billion globally and €4.6 billion in Europe alone. This figure doubled from the previous year and most of the FinTech investments were in the B2B field.
With Advancement Comes Change and Risk
A good example of how digitalization and technology have changed the financial sector can be seen in the onboarding process and security. By the end of 2020 1.9 billion people are predicted to be using e-identification and biometrics to access their financial services via mobile banking.
Backroom Banking in the Digital Age
Changes in the front of banking services are apparent and include mobile banking; biometrics and e-identification but backroom banking has also see dramatic changes especially in the management and generation of digital data flows; data exchange and distribution of data. These changes are supported by EU regulations and Open Banking is predicted to raise organic growth by as much as 10% in coming years. In 2007 only 17 banking APIs were available for third party use and by 2017 that figure had jumped to 1,500.
As an industry banking is leading the way in big data and business analytics solutions by employing data scientists, using AI, Cloud computing and more. Banks generate a gargantuan about of data each day and thanks to Cloud technology digital solutions are possible on the scale needed and for a reasonable cost. Cloud technology will inevitably become a part of everyday corporate and banking policy and the IT budget for public Cloud projects will rise from year to year.