Banks are at a crucial inflection point – they can either choose to transform themselves to disrupt the industry or die. The Banking and Financial Services (BFS) industry is transitioning from delivering banking-as-a-product to banking-as-a-lifestyle, as part of which banks orchestrate end-to-end customer experiences. To stay relevant, banks are rapidly evolving to match the pace of disruption by digital-native challengers such as BigTechs and FinTechs. In the US and Canadian banking markets, large banks are at various stages of their transition to the next state of banking. Mid-market banks – those with US$10 billion to US$100 billion Assets Under Management (AUM) – are in a tight-rope balancing act of meeting evolving customer demands, enhancing operational efficiency, and orchestrating an ever-expanding ecosystem. This triple mandate to grow, optimize, and defend is constrained, however, by legacy technology systems and a limited technology budget.
Over January and February 2020, Everest Group conducted a survey with more than 40 US and Canada-based mid-market banks to understand their business and technology priorities over the next 18 months. In a growth-constrained market, mid-market banks are looking to drive product and channel innovations, with a focus on enhancing customer experience. Our study reveals that legacy core banking systems are the prime deterrents to mid-market banks’ evolution, as they impact customer experience, are not agile enough to launch new products, and are difficult to integrate with other platforms. Due to these challenges, 95% of banks are not satisfied with their core banking systems, while 63% of banking leaders believe that a strategic approach to core banking modernization will help maintain competitive advantage and transition to the future state of banking.
Scope
Industry: Banking and Financial Services
Geographies: US and Canada
Contents
In this report, we deep dive into the US and Canadian mid-market banking industry and present our perspectives and findings on:
- The future of banking and its impact on mid-market banks
- Driving forces for core modernization in mid-market banks
- Appetite, intent, and approaches for core banking modernization
- Key implications and considerations for mid-market banks
Membership
Banking & Financial Services (BFS) - IT Services