Big Japanese and Canadian banks and some of Europe’s major lenders, including Intesa Sanpaolo and Standard Chartered, have been described as laggards in using technology to cut costs and automate operations, according to new research.
Nordic and US banks did best in a digitisation ranking of the 59 biggest developed market lenders compiled by research company Autonomous.
The report forecast digitisation of bank operations would help them cut €30bn of their combined €233bn of branch network costs, for instance by reducing the number of staff needed to serve customers and process data.
Autonomous said the banks with the most potential to do better than analysts’ profit expectations because of digitisation were: JPMorgan Chase and SunTrust in the US, Spain’s CaixaBank, Lloyds Banking Group in the UK and KBC in Belgium.
“The banks [at the top of the rankings] can turn their technology advantage into higher return on equity,” said Stuart Graham, banks strategy partner at Autonomous. “As people serve themselves, so you don’t need branches and, more importantly, you don’t need the people in the branches, which is a big cost for banks.”
Autonomous ranked the banks based on two criteria: their current level of digitisation, or how close they were to being able to cut significant costs and their transformation outlook, or whether they would be able to execute cost cuts.
It assessed 18 attributes, from customer ratings of mobile banking apps to IT expertise on boards of directors. Some of the attributes were scored based on an Autonomous survey of the banks about their use of technology.