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TEMENOS Group AG Head Office

Temenos Headquarters SA, 2 Rue de l’Ecole-de-Chimie, CH - 1205 Geneva, Switzerland
Geneva
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ACTIS.BSP Germany GmbH Office

Einsteinstraße 2
Grosswallstadt
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Corporate Head Office Luxembourg Office

Odyssey Financial Technologies S.A.
Espace Kirchberg-Eolis; 26-28 rue Edward Steichen
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5th Floor, 71 Fenchurch Street
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Hahnstraße 31-35
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100 High Street
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Av. Roque Petroni Jr. 999-13° andar
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7, Rue des Primeurs
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46 Chancery Lane
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2340 Harborside Plaza 5 Floor 23 185 Hudson St #100
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Unit 1001, 10/F, Miramar Tower, 132 Nathan Road
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6, Temasek Boulevard #21-04 Suntec Tower Four
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58, Rue de Châteaudun
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Westendstrasse 28
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Safina Towers Private Limited 3 Ali Asker Road
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17, Rue des Marchandises
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7 Exchage Place IFSC
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201 Portage Avenue, 18th Floor
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Unit 6011 6th Floor 21st Century Tower 210 Century Avenue Pudong District
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Suite 249, Regus Business Centre Time Square Unit 1, Level 2, "B" Wing Andheri Kurla Road Andheri (E)
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Temenos USA, 10 Inverness Center Parkway, Suite 250, Birmingham, AL 35242, USA
Birmingham
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Shanghai Office

Suite 1008, Hong Jia Tower, No.388, Fushan Road, Pudong new District, Shanghai, China 200122
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Pudong new District
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Dubai Office

Temenos Middle East Ltd, Dubai Internet City, Aptec Building, EIB-03, Office # G-01, P O Box 500060, Dubai, UAE
Dubai
AE

Singapore Office

Temenos Singapore PTE LTD, 61 Robinson Road, #20-01 Robinson Centre, Singapore 068893
Singapore
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Telephone

44 207 423 3745

Contact

Manjinder Jaul
[email protected]
Back to all Temenos announcements

Collaboration between banks and fintechs is the key to survival according to an in-depth survey released today by Temenos

  • Regulators shape bank strategies with regulations cited across the top 3 biggest impacts on banking to 2020
  • 56% of retail banks agree more payments will flow via fintechs than banks by 2020
  • Although the fear of fintech disruption is decreasing, 73% of respondents express concern for cyber threats increasing with open banking
  • 34% of banks are focusing digital investment in cyber security

With new regulations such as EU's Second Payment Services Directive (PSD2) and open architecture framework forcing banks to share their customers' transactional data, regulation may well tip the scales between banks and fintechs for customer loyalty. Concessions must be made on both sides along the way, but in the end the collaborators will be the ones to survive – that's according to an in-depth study released today by Temenos, the software specialist for banking and finance.

The report explores one central theme: 'Symbiosis: Your bank has your trust. Can fintech make you love it?' The report, the fourth in a series conducted for Temenos by the Economist Intelligence Unit (EIU), offers a new twist in the 'tug of love' story of banks and fintechs under changing regulatory and compliance rules.

David Arnott, Chief Executive Officer at Temenos, says: "The struggle between banks and fintechs for customer loyalty is not new, however new regulation and technology change is now driving a shift towards collaboration. Banks with a modern core and an open and flexible architecture will be best placed to seize the advantage and thrive. Temenos is proud to be working closely with banks and fintechs on their digital strategies and championing collaboration via the Temenos MarketPlace"

Renee Friedman, the editor of the report from the Economist Intelligence Unit, adds: "Banks will increasingly have to adapt their culture and digital strategies to their customers' needs if they are to compete, not expect their customers to bend to theirs."

About the survey

The Economist Intelligence Unit surveyed 200 senior retail banking executives about regulatory, customer, security and technology influences on the industry up to the year 2020.

In addition, in-depth interviews were conducted with 36 senior executives from banks of all sizes, start-ups, venture capitalists and mutual fund managers.

The key findings show:

  • The regulators will decide -  Capital and compliance will shape incumbents and newcomers alike. Banks cite regulation as the most impactful trend in the coming years: bank capital requirement regulation (54%), bank product suitability regulation (53%), product design and transparency regulation (47%); regulatory fines & recompense orders (30%)
  • Into the Unknown - American banks worry about regulation the most, despite a promised rollback. European policy direction is more certain yet onerous.
  • Resistance is futile - The EU's Second Payment Directive (PSD2) and open architecture are game changers. Banks may lose their customers' loyalty, fintech could hit compliance barriers.
  • Complacency is not a virtue - Fear of peer-to-peer lenders and robo-advice may have peaked. Non-banks could still steal deposit and lending business - and profit unless banks improve the customer experience.
  • No cash, no cheques - If banks are smart, they may still win the war to build truly universal digital networks.
  • Banks main concerns on cyber security are lack of system preparedness in the event of a cyber-attack (65%) and the ability to maintain data security (60%)
  • The possibilities of blockchain are still not fully understood - 34% think of it only as a tool to reduce financial crime while 34% see its greatest value in increasing the speed and reducing the cost of back office functions
  • The majority of bankers surveyed (55%) think that Anti-globalisation movements will negatively affect retail banking by 2020.