European FIs prioritising investment in compliance-related use cases, Tink research finds

Financial institutions are prioritising investment in use cases that deliver immediate value to their business, according to data published by Tink.

71% of financial executives surveyed across Europe are putting compliance related use cases at the top of their investment list. Of these, 41% are prioritising digital identity services, 41% KYC process automation and 37% transaction monitoring. 

Meanwhile, some financial institutions are also looking past compliance and exploring improvements to the customer experience, with 36% investing in financial management services, 35% in onboarding process automation, and 33% in multi-banking applications. 

Tink’s data also reveals that the motivation to invest in one use case over another depends largely on a company's exposure to regulations but also the nature of the business. The size and maturity of a business is an important determinant of where money is invested, with larger institutions such as traditional retail banks (57%) and wealth management companies (53%) ranking digital identity services as the number one area of investment.

Meanwhile, challenger banks and PSPs are the only two segments where a non-compliance related use case is ranked as the top investment area — with challenger banks prioritising onboarding automation (44%) and PSPs investing in multi-banking services (47%).

Smaller businesses (with 100-499 employees) are focusing on streamlining the customer experience, with 54% investing in KYC process automation (compared to just 29% of institutions with 1,000+ employees). On the other hand, large organisations (with over 1,000 employees) are focusing primarily on digital identity services (42%). This is likely due to the SCA requirements articulated in PSD2.