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The Bank of Ireland plans to invest €500 million ($588 million) in upgrades to its core IT infrastructures over the next five years or so, according to the Irish Times.
Part of this investment will go toward updating its core banking platform, which will include support not only for new digital customer facing channels, but also advanced data analytics and compliance solutions. The updates highlight the bank’s intention to transform both its back-end functions and customer experience.
Incumbents are increasingly realizing the need to upgrade their core systems in a rapidly-digitizing landscape. Bank of Ireland’s move appears to be in line with a recent trend of banks waking up to the notion that simply developing front-end digital products will not be enough if they want to compete with digital-native fintechs.
North American banks, in particular, have been investing heavily in digitally transforming their entire businesses, but until now EMEA banks havelagged behind. The Bank of Ireland’s announcement, along with with Dutch bank ING’s recently publicized digital transformation efforts, suggest that European banks at least are acknowledging the problem.
Digital overhauls of banks’ core systems are risky, but unavoidable. A quarter of attempted core banking transformations fail entirely, while half do not deliver expected outcomes, according to Cognizant — which estimates that only 25% of digital overhauls are successful. In spite of this, ignoring the need for digital transformation could leave incumbents far worse off, thanks to the growing threat from fintechs and new digitally focused challenger banks.
The fact that Bank of Ireland is investing so much in this project suggests that it thinks the move is unavoidable, and we expect to see more banks reaching this tipping point soon.
Banks such as the Bank of Ireland have clearly recognized that we’ve entered the most profound era of change for financial services companies since the 1970s brought us index mutual funds, discount brokers and ATMs.
No firm is immune from the coming disruption and every company must have a strategy to harness the powerful advantages of the new fintech revolution.
The battle already underway will create surprising winners and stunned losers among some of the most powerful names in the financial world: The most contentious conflicts (and partnerships) will be between startups that are completely reengineering decades-old practices, traditional power players who are furiously trying to adapt with their own innovations, and total disruption of established technology & processes:
Traditional Retail Banks vs. Online-Only Banks: Traditional retail banks provide a valuable service, but online-only banks can offer many of the same services with higher rates and lower fees
Traditional Lenders vs. Peer-to-Peer Marketplaces: P2P lending marketplaces are growing much faster than traditional lenders—only time will tell if the banks strategy of creating their own small loan networks will be successful
Traditional Asset Managers vs. Robo-Advisors: Robo-advisors like Betterment offer lower fees, lower minimums and solid returns to investors, but the much larger traditional asset managers are creating their own robo-products while providing the kind of handholding that high net worth clients are willing to pay handsomely for.
As you can see, this very fluid environment is creating winners and losers before your eyes…and it’s also creating the potential for new cost savings or growth opportunities for both you and your company.
After months of researching and reporting this important trend, Evan Bakker, research analyst for BI Intelligence, Business Insider’s premium research service, has put together an essential report on the fintech ecosystem that explains the new landscape, identifies the ripest areas for disruption, and highlights the some of the most exciting new companies. These new players have the potential to become the next Visa, Paypal or Charles Schwab because they have the potential to transform important areas of the financial services industry like:
Lending and Financing
Payments and Transfers
Wealth and Asset Management
Markets and Exchanges
If you work in any of these sectors, it’s important for you to understand how the fintech revolution will change your business and possibly even your career. And if you’re employed in any part of the digital economy, you’ll want to know how you can exploit these new technologies to make your employer more efficient, flexible and profitable.
Among the big picture insights you’ll get from The Fintech Ecosystem Report: Measuring the effects of technology on the entire financial services industry:
Why financial technology is so disruptive to financial services—it will soon change the nature of almost every financial activity, from banking to payments to wealth management.
The basic conflict will be between old firms and new—startups are re-imagining financial services processes from top to bottom, while incumbent financial services firms are trying to keep up with new products of their own.
Both sides face serious obstacles—traditional banks and financial services firms are investing heavily in innovation, but leveraging their investments is difficult with so much invested in legacy systems and profit centers.
Meanwhile, startups are struggling to navigate a rapidly-changing regulatory landscape and must scale up quickly with limited resources.
The blockchain is a wild card that could completely overhaul financial services. Both major banks and startups around the world are exploring the technology behind the blockchain, which stores and records Bitcoin transactions. This technology could lower the cost of many financial activities to near-zero and could wipe away many traditional banking activities completely.
This exclusive report also:
Explains the main growth drivers of the exploding fintech ecosystem.
Frames the challenges and opportunities faced by incumbents and startups.
Breaks down global and regional fintech investments, including which regions are the most significant and which are poised for the highest growth.
Reveals which two financial services are garnering the most investment, and are therefore likely to be transformed first and fastest by fintech
Explains why blockchain technology is critically important to banks and startups, and assesses which players stand to gain the most from it.
Explores the financial sectors facing disruption and breaks them down in terms of investments, vulnerabilities and growth opportunities.
And much more.
The Fintech Ecosystem Report: Measuring the effects of technology on the entire financial services industry is how you get the full story on the fintech revolution.
To get your copy of this invaluable guide to the fintech revolution, choose one of these options:
Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
Purchase the report and download it immediately from our research store. >> BUY THE REPORT
The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the fast-moving world of financial technology.