Many institutions in the banking sector are choosing to build their own innovative tech solutions to meet customers’ digital needs, new research has revealed.
Research into corporate banking by NTT Data has found that banks are investing in technology solutions in vastly different from as recently as two years ago, with digital ways of working changing client expectations. The report outlined a major dilemma faced by banks in response to the increasing corporate demand for tech solutions. As a result, more banks than ever are looking to digitise their platforms, with 61% preferring to build out their own technology stack, rather than buy technology solutions from a third party.
NTT Data’s report, Global Research into Corporate Banking’s Future 2022, surveyed banking respondents across the globe and examined the state of corporate banking following the COVID-19 pandemic. The build versus buy debate formed a significant part of the report, detailing how banks have responded to the growing corporate demand for tech solutions.
While the majority of banks are electing to build their own solutions to meet client demands, only 22% are building their solutions from scratch whilst 78% are building upon their current cash forecasting solution. For those electing to buy tech solutions, 54% are planning to work with fintech or a third-party provider, whilst 46% are integrating an off-the-shelf solution.
In Europe, the preferred option is to build their own technology solutions for advanced cash forecasting, matching global trends, while over a third are looking to fintech providers to support their technology offerings. Conversely, in LATAM, there is more willingness to trust external providers, with almost half (48%) of banks preferring to buy in a cash forecasting solution.
“There’s a tech stack demand that’s building for banks, and change is being demanded by their clients,” commented Miguel Mas Palacios, Director of Global Corporate Banking at NTT Data. “The conundrum is whether banks build their own tech, or buy it in. We’re seeing the speed of corporate banking is accelerating, and the pace of technology change is increasing too. Banks are investing in new technologies such as AI and automation, all driven by customer demand.”