Majority of Banks Are Not At Leading Edge of Data and Digital Transformation – Report

Gresham, a provider of financial technology solutions, has released a research report, titled “US Banks’ Data Transformation Journeys at a Crossroads” that reveals fewer than 1-in-10 banks are at the leading edge of data and digital transformation.

The report, which surveyed 120 banking leaders from “across the United States, found that the slow pace of innovation at U.S. banks is having a direct impact on their bottom line.”

Julian Trostinsky, Global Director of Solutions Engineering at Gresham Technologies, said:

“The extent to which banks are falling behind best practices in digital transformation, specifically in relation to data management, is alarming. Over 90% of banks lack a leading-edge pace of innovation. Even more concerning is the impact we uncovered: 74% of banks face revenue loss at least once per year as a result of poor data quality. The complexity and the volume of data that banks are expected to handle will drastically increase into 2025, as will the number of stringent reporting requirements put into place by regulators. Urgent change is needed on the part of bank leaders.” 

Key report findings include:

  • Fewer than 1-in-10 bank leaders say their organization is at the leading edge of digital transformation.
  • Of those ‘lagging behind’ or ‘working to catch up’ on digital transformation, the use of outdated legacy technology prevents banks from being confident in their processes.
  • 51% of respondents stated that their organization is not highly effective at complying with regulatory requirements for complete, accurate, and timeline reporting for reconciliation.
  • 68% of banks are susceptible to regulatory fines/penalties at least once per year due to poor data quality within their organizations.
  • Nearly 60% of bank leaders report that data they require to make strategic decisions is not available to them.

Jenn McMackin, Global Director of Customer Success at Gresham Technologies, said:

“There should be collective industry concern about the results of this research — particularly the finding that only 55% of banks fully trust the quality of their data. From a business perspective, data confidence is the key to happy customers and sound decision making. From a regulatory perspective, data integrity is a strict requirement and not an optional ‘nice to have’. Our firm recommendation is for banks to address these issues head-on with increased resources, attention, and the expertise of a trusted partner.” 

In undertaking this research, Gresham Technologies sought “to highlight the readiness of banks to rise to new challenges and opportunities stemming from digitization trends.”

This research explores how banks are addressing data operations “within their organizations and working with regulators to meet changing requirements. ”

With worryingly few banks on the leading edge of innovation, this research found “that the sector has significant obstacles to overcome to future-proof its market position in an increasingly competitive financial services landscape.”

The report revealed the need for U.S. banks to ramp up technology investment and innovation with the relevant solutions.

Respondents to the survey highlighted the effectiveness of modern tooling, “such as advanced automation, and cloud-based solutions to improve data quality and drive down costs.”

To get competitive and tackle the lack of internal resources, respondents also “revealed the opportunity to outsource their internal data processes to dedicated teams of experts to improve operations more quickly.”

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