30% of commercial banks see challenger banks because the biggest threat of 2021
More than three-quarters (80%) of bankers believe challenger banks are an increased threat to their business, while almost one-third (30%) believe they'll be the single most disruptive threat in 2021. Laptop computer, commissioned by fintech provider Fraedom, found that in response the challenger bank threat, bankers expect their organisations to take a position heavily in updating legacy systems (44%) and new technology (26%) in 2021.
“With challenger banks setting themselves apart by providing innovative technology platforms, commercial banks are actually realising they must invest in key areas to be able to counter this threat. This was also echoed by our survey which found other disruptive influences in 2021 to become digitalisation (36%) and consumerisation of technology (36%)” said Kyle Ferguson, CEO, Fraedom.
This comes as almost half (46%) of respondents perceive legacy systems to be the biggest barriers to the growth of commercial banks, while 32% cite it is the pressure to save money.
With investing in new technology high in agenda for commercial banks, laptop computer found that over half (53%) of respondents believe AI and Machine Learning will be the technologies to have the biggest impact on commercial banking in 2021.
“It is clear to see that challenger banks really are a disruptive force within the sector. By using innovative technology, these banks have plugged a gap left by established retail banks, and are serving as a stark warning to banks within the commercial space which remains available to similar disruption,” added Ferguson. “If commercial banks are to compete, they must become more agile and adopt new technology platforms suitable for changing needs of businesses, or risk being left out.”