# How Banks Are Digitally Transforming To Compete Against An Army Of Fintechs Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-10-27 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: How Banks are Cashing in on the Digital Revolution in 2017 Meta Description: Explore the impact of digital disruption on UK banks and the Fintech industry, with insights from CEO Farida Gibbs of Gibbs Hybrid. Tags: featured Tag URLs: featured (https://financedigest.com/tag/featured) URL: https://financedigest.com/how-banks-are-digitally-transforming-to-compete-against-an-army-of-fintechshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/fd271017-1-1-1736843334657-compressed.jpg) _**Farida Gibbs**, CEO of technology consultancy Gibbs Hybrid, explores how banks are cashing in on the digital revolution_ The growth of the Fintech industry has been fuelled by an increasing amount of investment. The UK Fintech industry is on track to generate a record amount of investment in 2017 of over£759 million. [\[1\]](#_ftn1) The lines are increasingly being blurred between the competition banks are facing from companies such as Transfer Wise and Atom Bank alongside technology giants such as Google, Apple and Amazon who are entering the fast-moving payments sector. This week,UK [banks are kicking off their third quarter](https://www.financedigest.com/polands-bank-millennium-third-quarter-results-hit-by-payment-holidays.html "Poland’s Bank Millennium third-quarter results hit by payment holidays") earnings, against a backdrop of an increasingly volatile and competitive landscape being disrupted by regulatory changes and heightened customer expectations. The banking industry is being digitally disrupted at every level, from front-end services such as payments to [broader transformation in systems enabled by digital technologies](https://www.financedigest.com/transforming-the-retail-banking-ecosystem-its-all-about-technological-innovation.html "TRANSFORMING THE RETAIL BANKING ECOSYSTEM: IT’S ALL ABOUT TECHNOLOGICAL INNOVATION") such as big data, automation, and the cloud. This shift is changing the banking model as we once knew it. Pressure from regulators, competitors and customers are all [pushing banks](https://www.financedigest.com/central-banks-ease-off-on-rate-hike-push-in-october.html "Central banks ease off on rate hike push in October") to digitise their processes and service offerings from all sides. Banks are having to keep pace with consumers who demand access to real-time, mobile-driven technology to manage their finances. The stakes will be raised with the [open banking](https://www.financedigest.com/what-does-2022-hold-for-open-banking-some-predictions-from-the-ecosystem.html "What does 2022 hold for open banking? Some predictions from the ecosystem") initiative that comes into play in 2018, stipulating that banks won’t have the right to deny third parties access to data, when requested to share it by the customer.  Their established base will be further threatened by [fintech innovators](https://www.financedigest.com/the-role-of-fintech-in-shaping-innovative-future.html "The Role of Fintech in Shaping Innovative Future"), who can leverage customer data to deliver tailored solutions. The battle for the [customer is on – they value](https://www.financedigest.com/cracking-the-code-of-customers-future-value-in-retail.html "Cracking the code of customers’ future value in retail") speed, convenience and access. Innovative solutions offered by digitally savvy competitors give them the ability to offer [lower prices](https://www.financedigest.com/companies-cost-inflation-is-slowing-but-shoppers-may-wait-for-lower-prices.html "Companies’ cost inflation is slowing but shoppers may wait for lower prices") whilst also delivering intuitive and compelling customer experiences. With more channels at their disposal to [manage their finance and payments,customers will flock to the service](https://www.financedigest.com/cyclic-innovation-to-drive-the-medical-case-management-services-market.html "Cyclic innovation to drive the Medical Case Management Services Market") which is faster and easier to access. [Banks are provided with the opportunity to capitalize](https://www.financedigest.com/be-simple-in-bank-capital-bank-of-england-tells-global-regulators.html "Be simple in bank capital, Bank of England tells global regulators") on their established customer base by optimising the experiences they offer customers. The speed of innovation is rapid and [banks cannot afford to waste time](https://www.financedigest.com/now-is-the-time-for-banks-to-introduce-intelligent-account-analysis.html "Now Is the Time for Banks to Introduce Intelligent Account Analysis"), money or resources. Unlike new entrants, the task of harnessing the power of [digital for banks](https://www.financedigest.com/being-the-best-digital-bank-is-not-enough.html "Being the Best Digital Bank is Not Enough") must start with back-office processes and systems. Banks’ IT infrastructures are often decades old, hindering their ability to quickly [adopt new consumer-facing technologies](https://www.financedigest.com/specialty-printing-consumables-market-rising-adoption-of-advanced-technologies-to-bolster-markets-growth-prospects.html "Specialty Printing Consumables Market – Rising Adoption of Advanced Technologies to Bolster Market’s Growth Prospects"). Outdated [systems lead](https://www.financedigest.com/blood-thawing-systems-market-analysis-growth-opportunities-future-demand-and-leading-players-updates-by-forecast-2030.html "Blood Thawing Systems Market Analysis, Growth Opportunities, Future Demand and Leading Players Updates by Forecast 2030") to inefficient operations and leave banks trailing behind their technology savvy competition. For example, with the proliferation of smart phone and tablet usage, [customers increasingly expect](https://www.financedigest.com/how-omnichannel-cx-can-help-insurers-meet-customer-expectations.html "How omnichannel CX can help insurers meet customer expectations") real time updates about their finances, anytime and anywhere. Updating a [bank’s IT ecosystem will lay the framework to create more digitally innovative front end products such as app services](https://www.financedigest.com/how-to-enhance-banking-services-with-digital-performance-intelligence.html "HOW TO ENHANCE BANKING SERVICES WITH DIGITAL PERFORMANCE INTELLIGENCE"), chatbots and virtual assistants to engage with customers. [Banks are measuring up against their digital](https://www.financedigest.com/how-fs-organisations-can-enter-the-new-age-in-digital-banking.html "How FS Organisations Can Enter The New Age in Digital Banking") competitors by adopting lean business process models to modernise their existing IT infrastructure. These offer a more cost-effective solution which revamps their existing IT architecture, without halting operations to install entirely new processes. In order to remain competitive, multinational institutions are raising their game by looking to partner with specialists who can help them embrace digital.According to Technavio’s [market research](https://www.financedigest.com/fucoidan-extract-market-research-report-2022-global-forecast-till-2028.html "Fucoidan Extract Market Research Report 2022 – Global Forecast till 2028"), the global outsourcing market in the BFSI sector will grow at a CAGR of more than 6% between 2016-2020. [\[2\]](#_ftn2) Investment has been driven by incumbent banks’desire to capitalise on new technologies such as automation, cloud and data analytics. Effective strategies are being implemented by banks with the support of digital specialists [to reduce operating costs, increase operational efficiency, and mitigate risk. In an attempt to grapple with the challenges and opportunities of the digital age, t](http://www.mckinsey.com/industries/financial-services/our-insights/strategic-choices-for-banks-in-the-digital-age) hese external partners allow banks to capitalise on their core strengths whilst simultaneously adapting to changing market pressures. [\[1\]](#_ftnref1) http://www.cityam.com/274142/uk-fintech-startups-track-record-breaking-year-investment [\[2\]](#_ftnref2) https://www.technavio.com/report/global-ito-and-bpo-outsourcing-bfsi-sector-market --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---