Economist Impact: European banks embrace cloud migration

Friday 16 February 2024 14:29 CET | News

Research from Economist Impact has shown that European banks prioritise migrating core banking systems to the cloud to fight competition from platform players.


New research from Economist Impact supported by Temenos finds that European banks are fighting back against competition from platform players, neobanks, and payment providers.

According to the study, ‘Challenging the challengers: Europe’s banks face the competition’, almost half (43%) are investing in fintech start-ups and a third (36%) are building their own greenfield digital bank or fintech company.

Economist Impact has shown that European banks prioritise migrating core banking systems to the cloud to fight competition from platform players.

Strategic shifts to cloud migration and AI adoption

To fight competition, European banks are also migrating core banking systems to public cloud and SaaS in greater numbers than their counterparts in other regions. 21% of European banks see cloud as a strategic priority, ensuring their operations are agile and secure to compete with more nimble competitors. AI is also a key part of their technology investment strategy, particularly to improve the customer experience and support digital marketing, with 75% of European bankers believing that the banking sector will be significantly impacted by generative AI.

The report reveals European banks are more likely to view neobanks as their company’s biggest competitors by 2029, compared to other regions. However, payment players and technology providers continue to be top of mind, with payments being the space European banks predict new entrants will gain the most market share. HSBC recently launched Zing, a new multi-currency payments app to compete with the likes of Wise and Revolut.

Commenting on the findings, officials from Economic Impact said fintechs and neobanks took the lead in using new technologies to provide better customer experiences. European banks are now fighting back, emulating the way non-traditional players have used technology to reach consumers who had been underserved by traditional financial services, and to appeal to existing customers with support in managing their personal finances.

Officials from Temenos said the competitive landscape is shifting. As neobanks and fintechs experience growing pains and face funding difficulties, Europe’s banks are taking advantage of the opportunities afforded by Open Banking by pursuing collaborations with their challengers to offer a wider range of better services to their customers. They are also investing in technology, using cloud-native banking platforms and SaaS to improve the customer experience and ensure their operations are agile and secure.

Temenos, a trusted SaaS provider to 700 banks, recently launched end-to-end SaaS services for retail, business, and corporate banking with over 120 pre-configured products, processes and 700 APIs, to enable banks to deploy software solutions in just 24 hours and significantly reduce modernisation costs. The company also recently announced Temenos LEAP, a new AI-powered offering that helps banks modernise faster to the latest cloud-native Temenos technology.

How to research was conducted

Economic Impact’s report presents insights from a global survey of 300 executives in retail, commercial, and private banking spanning Europe (25%), North America (23%), Asia Pacific (18%), Middle East and Africa (17%), and Latin America (17%). Respondents perform various job functions, such as IT, customer service, finance, marketing and sales, strategy and business development, and general management, among others. Half of the respondents were C-suite executives. This is the seventh year that Economist Impact has conducted this survey. The research also included interviews with industry practitioners to gain further insights.

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Keywords: cloud, banking, artificial intelligence, neobanks, fintech, research
Categories: Banking & Fintech
Companies: Economist Impact, Temenos
Countries: Europe
This article is part of category

Banking & Fintech

Economist Impact



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