The future looks bleak for retail bank branches.
According to Temenos' "Retail Banking: In Tech We Trust" study, almost half (49 percent) of the retail banks worldwide said that the FinTech revolution will bring an end to branch-based banking, with the majority (64 percent) of them predicting that banking will be fully automated within five years.
The study also found that banks feel more threatened by tech companies operating in the financial services sector today than they did last year. Among their concerns is a predicted dramatic decline in the use of cash on the high street by 2020, with FinTech startups and tech companies facilitating the majority of payments, as well as freely available peer-to-peer lending through banking platforms.
In response to these concerns, banks are increasingly making technology as part of their offerings by partnering or cooperating with service providers, or investing in their own digital platforms, said David Arnott, Chief Executive Officer at Temenos.
However, the study revealed that those efforts will be hindered by challenges relating to recruitment (35 percent), system integration and compliance (34 percent), and legacy systems (31 percent).
"The digital revolution has moved from existential threat to potential survival strategy for the world's retail banks and strategically banks have a number of responses. The correct path is not yet clear-cut," said Monica Woodley of the Economist Intelligence Unit.
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