Big banks turn to fintech firms to define the future of digital banking

According to a survey of 16,000 customers in 32 countries, Canadians were again rated the most satisfied with the customer experience they received from their banks. Netherlands, Czech Republic, U.K. and Switzerland round out the report's top five.

The World Retail Banking Report, which in turn interviewed more than 140 industry executives from around the world, also identified "partnering with fintech firms" as an increasingly popular strategy for banks in dealing with rising customer expectations.

3 Major revelations from this year's World Retail Banking Report

  1. Nearly two-thirds of customers are using fintech products/services

    If you're not surprised, recall that the 2014 World Retail Banking Report didn't register the term "fintech," even once. What is more startling is the fact that customers are now more willing to recommend their fintech solution providers (54.9%) than their primary bank (38.4%).

  2. Bank executives have underestimated the value offered by fintech firms

    To appreciate the predicament many banks have found themselves in at the hands of new disruptive technology, consider the discrepancy between customers and bankers when it comes to rating the most important elements of a typical fintech firm's value proposition:

    • 81.4% of customers report "faster service" or "quick turnaround" as important vs. 35.6% of banking executives
    • 79.6% of customers identify "a good experience" as significant vs. 39.6% of bank executives
  3. Only 15.9% of customers say they would buy additional products from their bank

    "Clearly, the ingenuity and creativity that fintech firms are bringing to product development are starting to have an impact," explain authors of the report. "Customers are expecting much more in the way of innovation."

Partnership the best way to manage threat from fintech firms

With 87.9% of people around the globe now trusting fintech providers and 87.1% of bank executives reporting their infrastructure as inadequate to support the future of digital banking, momentum is invariably swinging toward mutually beneficial partnerships with fintech firms – turning threats into opportunities.

According to the report, 65.3% of bank executives now view fintech firms as partners, with the most popular ways of partnering being "through collaboration" (45.5%) and "through investment" (43.6%). Meanwhile, 42.6% view "competing through building capabilities" as a viable strategy, while 17.8% consider "acquiring fintech and tech" a potential solution.

Needless to say, "doing nothing" — as selected by 4% of executives — would seem to be the most perilous option.

Hear from industry leaders why Toronto, Ontario is the best place for financial firms to collaborate with fintech

The annual World Retail Banking Report is carried out by Capgemini and the European Financial Management Association (EFMA). Capgemini is a provider of consulting, technology and outsourcing services, with more than 180,000 people in over 40 countries; EFMA is a 3,000+ member global non-profit organization established by banks and insurance companies that facilitates networking between decision-makers.

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