Posted By Gbaf News
Posted on July 5, 2017
Technology integrator warns that competing with these challenger banks creates data issues for the big players
The latest ranking of the world’s largest banks released today shows that UK challenger banks are growing in a difficult market.[1] Whilst the UK’s big players fell down in The Banker’s annual world rankings, challenger banks saw dramatic improvement, moving up 187 places in the case of Metro Bank. Aldermore, Shawbrook and OneSavings also entered the global top 1,000 for the first time.
Challengers look set to continue capitalising on changes in the global financial services industry. Banks’ fears that standalone FinTech firms threaten revenue are increasing: an industry survey by PwC recently found 88 percent believe income is at risk, compared to 83 per cent last year.[2]
But challengers, less encumbered by legacy IT systems and extensive product offerings, have been able to profit from collaboration. Many have been able to successfully club together to provide ‘best in class’ solutions which make use of disruptive financial technology.
A large majority of global banks intend to increase their partnerships with FinTech companies over the next 3-5 years. Upcoming PSD2 regulation will in fact require established banks to move into this more open environment, sharing customer data via open APIs.
But leading technology integrator World Wide Technology warns that issues around data storage and security can create a real barrier to innovation.
Ben Boswell, UK & Ireland Director at World Wide Technology, comments: “This latest ranking indicates that the newer, so-called challenger players are finding it easier to adapt to the regulatory environment and consumer demands. We’ve already seen a surge in the number of financial services firms taking on board technology innovations as they seek to take full advantage of digital possibilities. But the data challenges which collaboration and the open banking environment creates – particularly around security – are significant, and hit the largest players hardest.
“It becomes harder to create a unified security policy when bringing together culturally different companies that may have a different attitude towards BYOD or mobility devices on the network.
“As complexities like this come into play, it becomes very important that institutions undertake a scale down exercise on the network environment, in order to identify exposure points at the end user level. This can help to ultimately secure the data that is held centrally and may help the UK’s biggest banks take hold of the data opportunities on which many challengers are currently ahead.”
