3 in 5 banks plan to invest in new customer-facing technologies

Recruiting and retaining talent is another key growth agenda.

While only 11% of banking executives globally expect their financial performance to improve significantly over the next 12 months, 60% of banks see the need to invest in new customer-facing technologies to spur growth, according to the EY Global Banking Outlook 2017.

This study of senior executives was conducted among almost 300 banks across Europe, the Americas, Africa and Asia-Pacific (including Australia, Japan, Hong Kong and Singapore, and the emerging markets of China, India, Indonesia and Malaysia).

With current sentiments dampened by generally weaker economic climates, banks’ immediate priorities center around a defensive “protect and control” mode as they focus on building an agile and sustainable business model for the future.

Of the global respondents, 69% and 66% respectively indicated managing reputational risk, and meeting regulatory compliance and reporting standards as the top two strategic priorities in 2017. This reflects a magnified emphasis on strengthening risk profiles and culture while meeting corporate governance obligations.

The survey also identified two key growth agendas globally: recruiting and retaining talent (63%) and investing in new customer-facing technology (60%). The first initiative appears especially critical for Asia-Pacific institutions as management seeks to secure talent, raise employee engagement and ensure that labor resources are in place to capture growth opportunities, particularly for front-line and digital-related undertakings.

Jan Bellens, EY Global Emerging Markets Leader, Banking & Capital Markets, stresses that banks cannot simply wait for a return to normalcy in order to achieve meaningful profitability. “In the current environment, the global banking industry must innovate in order to grow, institutions need to seek alternative ways to reshape, organize and optimize their businesses, while concurrently meeting regulatory obligations and actively engaging customers,” he says.