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European banks, under pressure from Neobanks and Fintech
European banks, under pressure from Neobanks and Fintech
Recent research by Economist Impact unveils a European banking sector actively confronting competition from neobanks and payment providers.
According to the study “Challenging the Challengers: Europe’s Banks Face the Competition,” 43% of banks now invest in fintech startups, and 36% venture into building their own digital banks or fintech companies. This proactive approach extends to infrastructure, with many European banks migrating their core banking systems to the public cloud and SaaS, exceeding the adoption rate observed in other regions.
Notably, 21% of European banks view cloud migration as a strategic priority, underlining their commitment to agility and security in the face of new competitors.
The integration of AI is also a pivotal component of their technological investment strategy, aimed at enhancing customer experiences and supporting digital marketing. A significant majority of European bankers, amounting to 75%, anticipate substantial impacts on the banking sector due to AI.
The report indicates that European banks perceive neobanks as their primary competitors over the next five years compared to counterparts in other regions.
Recognizing the strategic importance, European banks prioritize migrating core banking systems to the cloud and adopting Software as a Service (SaaS) to enhance customer experiences and ensure operational agility and security.
Nevertheless, payment players and technology providers remain in the leading position, with European banks predicting that new players will dominate and gain market share in the payments sector.
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