Almost half (46%) of Canadian financial executives say banks lack the required infrastructure, systems and processes to meet customers’ expectations for mobile payment services, finds a report by CenturyLink, Inc.
What’s more, the report says that banks’ core services also need improvement. More than a third of the bank execs surveyed (40%) says the IT infrastructure their companies have in place is weak.
“To stay competitive, Canadian banks must be mobile technology innovators,” says Roji Oommen, managing director of financial services at CenturyLink. Otherwise, as 78% of execs predict, customer demand for new digital services and apps will lead banks to outsource.
Already, 86% of those surveyed say they outsource for IT infrastructure requirements, while 72% outsource for cyber security.
Canadian Press says the entrance of technology companies into the financial services space has been the subject of heated discussion in recent months. Top executives of some of Canada’s biggest banks have commented during annual general meetings that banks need to adapt or risk losing market share.
RBC’s chief executive, Dave McKay, says banks need to work with early-stage financial technology companies, in order to thrive in an increasingly digital world.
Meanwhile, TD Bank CEO Bharat Masrani has urged financial regulators to introduce rules governing new entrants, which are not subject to the same regulations as banks and other financial institutions—he adds that gives new entrants unfair advantage, and could threaten the stability of the country’s financial system.
However, CIBC CEO Victor Dodig has said that reports about technology companies snatching market share away from the banks are overblown. In a speech, he said, “Will clients move in droves to these new technology platforms? I don’t think so. It won’t happen that quickly.”
But Oommen warns that some mammoth institutions tend to be slow to adapt to change. “In the mobile space, you need to move much quicker. Your customers are being spoiled by Google and Apple, and the expectation is that you need to adapt very quickly.”