People, not products, are the future of banking, according to Economist Intelligence Unit report for Temenos

Geneva, Switzerland–(COMMERCIAL THREAD) – A new report from the Economist Intelligence Unit released today by Temenos (SIX: TEMN), the banking software company, reveals that four in five bankers (81%) believe financial institutions will seek to differentiate themselves on customer experience rather than on their products and services over the next four years. The report highlights the importance of the customer experience, as the changes in customer banking behavior triggered by the pandemic are creating long-term structural changes.

The report, entitled “More demandingIs based on a recent global survey of 305 senior banking executives conducted by the Economist Intelligence Unit (EIU). The report highlights how financial institutions have been forced to adapt to the sudden movement of customers managing their finances online, which has proven to be beneficial for digital-only banks. For example, in January 2021, 14 million UK citizens (27% of UK adults) had a digital-only bank account, which represents a 16% growth from January 2020 and a 3X increase compared to January 2019. Almost three in four respondents (71%) globally expect cash to account for less than 5% of all retail transactions globally by 2025.

The shift to online banking has highlighted the changing way financial institutions handle relationships and the demise of the traditional branch. The top strategic priorities of global bank executives are all customer-centric. Improving the customer experience and engagement, including personalization and privacy, was rated as the strategic priority by 30%.

The report further reveals that consumers, especially Millennials and Gen Z, are increasingly demanding that businesses adopt responsible business practices. This leads to business engagement on issues important to consumers, such as tackling climate change and promoting diversity and financial inclusion. In addition, bank executives prioritize the financial empowerment of their customers. The results show that around one in three financial institutions plans to develop microfinance for entrepreneurs (34%), deposits for unbanked populations (33%) and responsible loans to underbanked populations (32%) over the course of over the next one to three years.

Joaquin de Valenzuela Muley, SVP & Business Line Director – Temenos Infinity, said: “Banking is a very human experience, and yet for many, banking does not happen as we live our lives. In today’s world, the relationship financial institutions have with their members or customers is more critical than ever. Banks are moving their customers from physical to digital channels and the winners will be those who can infuse privacy into those channels. Banks will need to deliver a digitally-driven customer experience in assisted and online channels – offering advice, value-added services and ‘always on’ banking services, helping individuals, families and businesses achieve their goals. dreams and aspirations. This report shows what should already have been obvious: banking is about people, and products must reflect that.

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About Temenos

Temenos AG (SIX: TEMN) is the world leader in banking software. More than 3,000 banks around the world, including 41 of the top 50 banks, trust Temenos to handle both the daily transactions and customer interactions of more than 1.2 billion bank customers. Temenos offers cloud-native, AI-agnostic and AI-driven front office, core banking, payment and fund administration software, enabling banks to deliver frictionless omnichannel customer experiences and achieve l ‘operational effectiveness.

Temenos software is proven to enable its top performing clients to achieve cost-revenue ratios of 26.8%, half of the industry average, and return on equity of 29%, or three times the average of the sector. These customers also invest 51% of their IT budget in growth and innovation versus maintenance, which is double the industry average, proving that banks’ IT investment adds tangible value to their business. business.

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Michael J. Birnbaum

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