Banks missing out on digital opportunities: Cisco study
Key digital solutions drive more than 90 percent of the value for retail banks
Retail banks have the potential to realize $405.3 Billion from 2015 to 2017 as the Digital Value at Stake (VaS), Cisco says in new research.
In contrast, financial services as a whole captured just 29 percent of that opportunity in 2015, according to the “Roadmap to Digital Value in the Retail Banking Industry,” study.
Of the challenges slowing growth and innovation, cybersecurity weakness is certainly at the forefront. Cybersecurity concerns have prevented retail banks from adopting digital technologies and business models. And this has contributed to them missing out on more than 70 percent of the potential revenue opportunity.
“With the pressing realities of agile ‘fintech’ disruptors, digital consumer demands, and complex regulatory hurdles, the question of how retail banks can compete and capture the revenue opportunity at hand has come to the fore,” says Mike Weston, Vice President, Cisco Middle East. “As the largest segment of financial services, retail banks play a critical role in any economy. The ability for digital technologies to create and drive new revenue opportunities, combined with the ability to lower operational costs through digitized business processes, brings tremendous opportunity. But, too many banks are moving slowly or not at all. By waiting to digitize their businesses, or by delaying new technology initiatives, banks risk not only missing out on the potential Value at Stake, but are actually at risk for being put out of business altogether.”
The new research outlines the Digital Value at Stake for retail banking – as well as a digital roadmap for success. The study reveals digital use cases that drive the fastest value and return on investment for retail banks. With the right technology investments such as analytics, mobility, video, and virtualised delivery models – and with a plan for navigating security risks – retail banks can create a blueprint for capturing their share of the hundreds of billions in Digital Value at Stake.
Cybersecurity concerns do not need to be a hindrance to digital innovation, Cisco advises. Retail banks can transform cybersecurity from a liability into an asset that supports customer trust, innovation, and growth. All of these digital solutions depend on a robust cybersecurity foundation.
“By assessing, adopting and combining the right digital use cases for their needs, and doing it securely, retail banks will capture their share of the Value at Stake and be in a position to operate more agilely and compete. By innovating and driving relevant new products and experiences to the market quickly, they can be the new disruptors,” Weston concludes.