zeb digital pulse check 4.0

In view of the far-reaching restrictions imposed by COVID-19, the pressure on the banking industry to digitalize has grown considerably in recent months. As the zeb consultants found out in their latest study, Digital Pulse Check 4.0, 75 percent of the bankers surveyed expect this development to have a lasting effect, resulting in a significantly greater need for action in the field of digital transformation. Two thirds of the institutions surveyed also stated that they wanted to expand their business model via digital ecosystems by 2023, albeit initially only with purely financial products and often without clear business cases. Retail customers are currently benefiting the most from the banks’ digitalization efforts. A large number of standard products are already available to them online. The picture is different in corporate banking. The study shows that many institutions see themselves only at the beginning of their digital transformation in this area; a sufficient digital offer for financial products and services is lacking.

These are selected results of the recently conducted digitalization study Digital Pulse Check 4.0 by zeb. In late summer, the strategy and management consultancy, which focuses on the European financial sector, examined for the fourth time the state of digitalization in the banking sector and surveyed a total of 159 participants from European banks with a focus on the DACH region and the regional bank segment. In addition to the status and progress achieved in digitalization, the study shows opportunities and potential that banks can use for their digital transformation.

Sven Krämer, zeb Partner, noted “Digitalization remains a challenging issue for banks in Europe. Board members figuratively have their heads in the sky of digital visions, while those who are expected to realize them often have their feet stuck in the mud of implementation. Greater prioritization and focus are needed to make digital transformation a success.”

Transformation costs are currently manageable

In detail, the zeb study shows that digitalization has arrived in the minds of decision makers. 84 percent of the banks regularly and systematically look at the behavior of their customers, innovations or new technologies. However, two thirds of the banks focus primarily on their own industry.

Moreover, digitalization is not failing because of the budget; only 17 percent of respondents see the investments associated with transformation as the greatest challenge. Instead, the institutions identify insufficient implementation speed and a lack of or insufficient focus and prioritization as clear deficits.

Digital platform as a business model

The authors of the study were surprised to see that two thirds of the institutions surveyed wanted to expand their business models via digital ecosystems, especially multi-channel financial platforms (60 percent) by 2023. In many cases, the necessary skills to leverage this potential are still lacking.

Above all, the aim is to create ecosystems closely related to the banks. Respondents who additionally plan to venture into the non-banking sector often intend to offer online services (82 percent). Due to the vague ideas about the direction in which such business models may be headed, it remains to be seen whether the institutions will actually realize the presumed potential in this area.

Good digital offering for retail customers, except for real estate purchases

Retail customers already benefit from the online availability of many standard products. Banks have succeeded in making more than three quarters of their products available online. In addition, accounts and securities accounts can be opened within one day at about half of the banks.

Only customers who want to take out a mortgage usually have to do so in person. The below-average online availability of mortgages shows that banks are leaving potential unused and that many executives seem to feel that complex products are still too difficult to offer digitally.

Digital products in corporate banking are in short supply

A look at the banks’ corporate banking segments shows that digitalization is lagging far behind the retail segment; there is a fundamental lack of digital products. In addition, the authors of the study see a lot of unused potential in process automation. For example, only a few banks offer digital onboarding as well as basic products and services that can be purchased directly.

Currently, only 17 percent of banks offer a business current account that can be fully opened online (retail customers: 47 percent). Online availability of working capital or investment loans is basically non-existent. The authors therefore note a certain resistance to change, which is surprising in view of new competitors such as Google, Amazon or specialized fintech companies.

Working together – using everybody’s digital skills

A look at bank managers and employees showed that they are still not sufficiently involved. Banks are thus neglecting a key success factor for their own digital transformation. Only 19 percent were convinced that their managers could be considered digital leaders and only 11 percent saw their bosses as role models.

What is needed is a personnel development concept that focuses more on working in a network than on strict hierarchies and systematically includes digital skills. 43 percent of respondents’ banks have at least added digital skills to their job profiles. Overall, however, banks do not sufficiently involve their employees in the transformation processes and thus miss out on important know-how.

Dr. André Ehlerding, Partner at zeb, said: “Digital transformation demands changes in corporate management. Previous management models must be more consistently adapted to market developments. This can be achieved if banks are oriented both to the needs of their customers and to the needs of their employees.”

The study is available here.

About zeb

As a leading strategy and management consultancy, zeb has been offering transformation expertise along the entire value chain in the financial services sector in Europe since 1992. In Germany, we operate offices in Frankfurt, Berlin, Hamburg, Munich and Münster (HQ). Our international locations are in Amsterdam, Copenhagen, Kiev, London, Luxembourg, Milan, Moscow, Oslo, Stockholm, Vienna, Warsaw and Zurich. Our clients include European large-cap and private banks, regional banks, insurers as well as all kinds of financial intermediaries. Several times already, our company has been classed and acknowledged as “best consultancy” for the financial sector in industry rankings.

zeb Contact

Franz-Josef Reuter
Head of Public & International Affairs
Phone +49 251 97128 347
E-Mail franz-josef.reuter@zeb.de


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