Bank managers: Big Tech will disrupt
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Read the article in Danish here.
The leaders of the financial sector in countries around the North Sea fear that big tech will turn the industry upside down, but they themselves are focusing on using technology to provide a better and easier experience for bank customers.
For example, a majority of decision-makers in the financial sector expect the vast majority of services to go virtual and for modern technology to account for most of their exchanges with customers. That is according to a survey on what the financial sector will look like in 2030 conducted by PA Consulting with 600 finance leaders across the UK. Netherlands, Sweden, Norway and Denmark.
Here, more than half of the 82 Danish executives responding to the survey say that they believe that artificial intelligence – AI – will take over traditional banking services by 2030, while half believe that the development of big tech, which has gone from offering niche products to being full-service financial companies, threatens the future of traditional banks.
I don't believe they can live without each other. The traditional advisers have the customers and competencies to handle the increasing amount of regulation, while fintech can assist with focused specialised innovative solutions that can complement individual steps in the customer journey”
However, the survey also shows that the leaders in the other countries in the survey are more nervous about technology companies' entry into the financial markets, and – with the exception of the Swedes – have the lowest expectation of artificial intelligence taking over from bank employees.
Big tech is gaining influence
According to PA Consulting, the increasing influence of technology companies is putting pressure on banks to digitise their business models even further in order to remain competitive. Three out of five of bank leaders in Denmark believe that the entry of technology companies will be what really drives the sector's transformation.
Based on what we are already seeing in the market, I have no doubt that big tech will have an increasing impact on the bank, insurance and pension funds of the future. I also believe that the ability to secure, nurture and manage partnerships will be a critical skill in the sector going forward”
By 2030, 72 per cent of financial leaders in Denmark expect traditional banks to continue working with the customer-facing "front", while other players will be responsible for the product itself, the "back-end offer", or that they will collaborate with big tech in other ways. However, 43 per cent of Danish finance leaders expect that traditional financial companies will still dominate the market seven years from now.
The Danish banking sector is already characterised by a large degree of division of labour around technology, as today only Danske Bank and Nordea have their very own data platforms, while the rest of the industry shares solutions provided by BEC, Bankdata and JN Data, among others.
It is not clear whether the Danish leaders are referring to existing technology collaborations, but 55 percent of them expect that partnerships with technology companies will be crucial for the financial sector to maintain its competitive strength in 2030.
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