Over €3 billion spent by retail banks on technology and innovation in last five years
Some €400m dedicated to engaging with over 100 Fintech companies, a third of whom were Irish.
Thursday 15th July 2021 – A new Banking & Payments Federation Ireland (BPFI) survey on innovation in banking has shown that retail banks here have collectively spent over €3 billion in the last five years on technology and innovation projects to deliver a range of new digital services for customers. These included end-to-end online mortgages, new and secure payment apps, personal loan applications, instant account opening, data analytics, money management tools and SME lending.
Some €400 million of this spend was dedicated to engaging and collaborating with over 100 fintech companies, a third of whom were Irish. These collaborations have resulted in enhanced customer experiences as well as new product developments.
The survey also revealed that the four main drivers for banks engaging with fintechs are:
- enhancing customer propositions and experiences
- developing new and complementary products faster than could be developed in-house
- driving cost efficiencies through partnering, outsourcing and co-branding
- advancing capabilities to ultimately gain competitive advantage
Speaking on the survey results, Eamonn Crowley, BPFI President and CEO PSTB said: “Retail banks have collectively invested over €3bn in the past five years in technology and innovation, a level of investment which demonstrates the focus on digitalisation within retail banks and the intensity of collaboration with Irish and international fintech companies. Over €400m of the spend has been invested in partnerships with fintechs to ensure banks are gaining access to the latest innovations and ideas. This has allowed us to match our skills and our knowledge of our customers with the insights and focus that external fintechs provide for the ultimate benefit of our customers.”
“Digitisation and collaboration with fintech is being used across the spectrum of bank products including customer-facing services such as digitised lending products, enhanced credit scoring, biometrics and Artificial Intelligence for account opening, improved customer support and wealth and money management tools. Digitisation and collaboration has also brought enhancements to back-office functions such as Regtech (technology to assist banks meet regulatory requirements), fraud detection and data analysis to help tailor services more accurately.”
“This trend is very much in line with international developments. According to a recent PwC ‘Global Fintech Report’, 94% of Financial Services firms surveyed said they were looking to fintech to help grow their company’s revenue over the next two years.”
Mr Crowley continued: “The fact that Irish firms account for one third of the 100 fintech partnerships that retail banks have entered into demonstrates a major vote of confidence in the local fintech sector. The reason we’re teaming up with so many Irish fintechs is because they offer the best solution, the best skills and the best package that suits our requirements.”
“The survey results clearly signal a growing appetite amongst banks to collectively work with fintechs to solve common problems and challenges. Rather than individual banks developing individual solutions to these challenges they are keen to explore if ‘utility’ style services could be used. This trend is likely to grow and will provide rich opportunity for further collaboration between banks and fintechs.”
“Everyone working in this area has a shared goal of making things better for customers, identifying what our customers need, how those needs are going to evolve over time, and how best those needs can be met,” Mr Crowley concluded.
The survey results can be viewed in BPFI’s Innovation in Banking Report which can be downloaded here.
Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has 100 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.
Contact: Jillian Heffernan, Head of Communications, 087 9016880 or firstname.lastname@example.org