Modern, cloud-based and as-a-service technologies help traditional institutions provide fast, online banking experiences, ISG Provider Lens™ report says
Many traditional banks around the world are meeting changing customer expectations and competing with new rivals by adopting digital banking platforms, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
The 2022 ISG Provider Lens™ Digital Banking Technology Platforms global report finds consumers increasingly demanding quick, online banking experiences rather than traditional transactions inside bank branches. Cloud-native neobanks were launched to deliver those experiences, while older institutions are catching up by replacing multiple legacy systems with new platforms and services, typically taking a phased approach.
“Traditional banks are taking action to attract new business,” said Owen Wheatley, lead partner, banking and financial services at ISG. “Digital banking platforms can help them engage with customers and update their services, but modernization requires time and a sound strategy.”
Many digital banking platforms are cloud-based, and more than 70 percent of banks are currently moving to the cloud, the report says. Benefits of cloud migration include lower costs, greater agility and faster time to market for new banking products. However, given the high stakes of handling customers’ assets, most banks are migrating the systems that support new accounts and products while keeping their existing business on legacy infrastructure for now.
Some banks are beginning to offset revenue lost to new competitors by working with them, ISG says. By letting financial technology startups connect to their systems via open APIs, banks are taking advantage of modular Banking-as-a-Service (BaaS). While startups help them offer faster deployment and more advanced data analytics for customer support, the banks bring regulatory, compliance and domain expertise.
“Partnerships with cloud-based platform providers are helping banks, especially smaller ones, compete cost-effectively,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Both core banking and payment processing are available as services, which cuts the time and expense of offering new products.”
New technologies are also transforming wealth management services, the report says. Capabilities including AI, machine learning, robotic process automation and trusted digital identification systems are now mandatory, especially for data analytics to support hyper-personalized services.
The report covers many other digital banking trends, including automation of manual tasks to cut costs, the rise of central bank digital currencies and how banks are participating in the growth of buy now, pay later (BNPL) services.
The 2022 ISG Provider Lens™ Digital Banking Technology Platforms global report evaluates the capabilities of 36 providers across three quadrants: Core Banking Platforms (with DBEH), Digital Payment Processing Platforms and Digital Wealth Management Platforms.
The report names Fiserv as a Leader in all three quadrants. It names Finastra, FIS, TCS and Temenos as Leaders in two quadrants each. ACI Worldwide, Adyen, Avaloq, Intellect Design, Infosys Finacle, Marqeta, NIUM, Oracle and Prometeia are named as Leaders in one quadrant each.
In addition, InvestCloud, Mambu and Volante Technologies are named as Rising Stars — companies with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant each.
The 2022 ISG Provider Lens™ Digital Banking Technology Platforms report for global is available to subscribers or for one-time purchase on this webpage.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.
A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 800 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.