Competition in the banking industry is intensifying. Neo-banks are winning market share and serving customers at around one third of the cost of traditional banks. Fintechs are targeting lucrative niches in the value chain. Big tech players, with their large customer bases, pose a real threat and a few incumbents are investing heavily in innovation, putting laggards in the shade.
Attackers are growing their businesses and attracting customers with the help of modern core technology architecture, which enables them to innovate faster and operate more efficiently. Not surprisingly, incumbent banks are increasingly concerned about the limitations of their own core architectures and their relatively slow pace of change. As a result, some 70 percent of banks are reviewing their core banking platforms, according to a McKinsey survey of 37 banking executives in May 2019.
Source – McKinsey & Company