Need to have digital strategy has replaced regulation as top concern for global retail banks, according to a survey conducted by The Economist Intelligence Unit (EIU) for Temenos.
According to report, 46% of banks cited digital as their highest priority for the next five years whereas regulation, which still has an impact on the industry, no longer comprise a priority for retail banks.
Over 36% of the respondent banks cited technology and ecommerce companies like Amazon and Apple as their new competitors while 21% pointed to non-financial services firms like traditional retailers.
The survey also revealed that the expected collapse in the profitability of retail banking has been worrying most of the lenders with 35% respondents citing retail banking as their primary source of income in the present, while 16% being positive about it till 2020.
Temenos chief marketing and strategy officer Ben Robinson said: "Changing customer behaviour is now overtaking regulation in its expected impact on the industry, and the survey confirms that banks are waking up to that threat and finally looking to invest in digital strategies to help in their fight to retain or add customers."
EIU editorial director Monica Woodley said: "While regulation will still have a huge impact on the industry to 2020, banks are recognising the incredible effect changing customer demands will have as well – and they are rightly responding by prioritising their digital strategy."