Few of the world’s traditional retail and commercial banks are leveraging digital technologies to maximum effect, and only 12% of them are fully committed to digital transformation, according to a study by global IT consultancy firm Accenture.
Such banks are estimated to have invested US$1 trillion over the past three years to transform their IT operations, but their balance sheets confirm that they are still far from achieving the anticipated revenue growth.
Most banks seem to have focused on increasing their market share rather than adding more revenue sources by launching new services, with many of them heavily dependent on the traditional fee income, according to the report.
“To achieve stronger returns on their digital investments, banks will need to radically increase market share based on pricing, take additional risk on new revenue opportunities or add services customers are willing to pay for,” according to Richard Lumb, group chief executive (financial services) at Accenture.
Many banks are using digital technologies to streamline their operations and increase efficiency. However, Accenture says that is not enough for the banks to increase their market valuation in the face of emerging fintech firms armed with cutting-edge technologies.
“To reap the rewards of digital investment, banks would do well to focus on balance sheet growth by, for example, using ‘open banking’ to help acquire and manage customer relationships,” according to Alan McIntyre, head of Accenture’s global banking practice.
Accenture said it analyzed more than 160 of the largest retail and commercial banks in 21 countries as part of the study.