Are EMEA’s banks prepared for the new world of banking?

Benchmarking 248 financial institutions across 38 countries in the most comprehensive digital maturity study yet

Many banks consider themselves to be leaders when it comes to digital but what is the reality? All banks have been forced to invest in digital capabilities but they have developed to a different degree. What has been lacking until now is objective data. That’s where the Deloitte Digital Banking Maturity project comes in, providing information on the position of each bank with respect to its digital offering, comparing apples to apples by taking into account the full spectrum of products and functionalities, mapped against consumer preferences in each market.

The Deloitte Digital Banking Maturity project, a joint effort of Deloitte member firms across EMEA, is a comprehensive and objective assessment of financial institutions’ digital maturity in three critical areas. A functionality review was conducted of 248 financial institutions across 38 countries. A team of 136 “mystery shoppers” opened current accounts and evaluated each bank’s internet and mobile banking channels to map their offering against 826 functionalities. In parallel, a customer survey was conducted, of more than 8,000 clients of banks in the same 38 countries, to understand customer needs and preferences for each market, and to be able to map each bank’s functionality against consumer expectation in their market. These were supplemented by an evaluation of mobile user experience (UX) by customers according to the User Experience Questionnaire (UEQ) framework.


Key insights

What defines Digital Champions

EMEA is highly
from point of view
of digital maturity
Market pressure from customers and competitors created Digital champions
Open and Beyond banking will decide who will be Digital champion of the future
Incumbents and FinTechs will have to find their position in the bank of the future model

EMEA is highly diversified from point of view of digital maturity

Benchmarked markets can be divided in 4 groups in terms of digital banking maturity
  • Digital Champions
  • Digital Smart Followers
  • Digital Adopters
  • Digital Latecomers
Which country’s banking sector is the most digitally mature?

To provide a snapshot of the results and identify some broad trends in digital banking, we compared the 5 largest banks by asset size of each country. Interesting patterns emerge in this EMEA view that allow us to make some qualified statements about what drives digital banking development.

Market pressure from customers and competitors created Digital Champions

Market pressure on the banking sector
  • Digital Champions
  • Digital Smart Followers
  • Digital Adopters
  • Digital Latecomers
EMEA’s digital banking leaders are a product of their environment

The two key environmental factors driving digital banking maturity are:
Customer preferences. When customers expect digital and omnichannel functionality from their banks, it becomes a competitive factor, which compels banks to deliver it.
Market pressure. When other banks in the market make the move into digital and leverage it as a key differentiator or area of competence, it puts pressure on competitors to keep up.

These factors are often correlated, but not always. In some countries (e.g. Poland), market pressure has driven banks to develop digital capabilities at a faster rate than customers expect. These banks investing in their future competitiveness, under the belief that customer preferences will inevitably catch up.

Open and Beyond banking will decide who will be future Digital Champion

Yet digital champions are already investing in Open/Beyond banking
  • Digital Champions
  • Digital Smart Followers
  • Digital Adopters
  • Digital Latecomers
Focused on Open and Beyond Banking

A few banks which differentiate themselves from the mainstream by focusing on Open/Beyond banking

Focused on digital supremacy

Leaders trying to future-proof their strong position in Digitalization by expansion to Open/Beyond banking

Focused on Digitaization

Digital offering reaching plateau phase as most of banking services are already transferred to digital

Focused on digital

Basic digital functionalities fulfilling only simplest customer needs related to core banking products

From digitization to the new world of Open Banking and Beyond Banking

While the survey focuses on digitization – the transformation of traditional banking products and services from brick-and-mortar into internet and mobile – there is growing pressure on banks to enter a new world of banking, as a result of changing regulation (mainly PSD2) and competition from FinTechs. The digital champions identified in the survey are also leaders in both Open Banking (expanding traditional banking products and services with new value-adding services, mostly delivered by third parties) and Beyond Banking (introducing non-financial value-adding services delivered by third party providers into their banking digital channels).

Maintaining a competitive edge in Open Banking and Beyond Banking will be critical to determining the digital champions of the future. PSD2 will change the dynamics of competition in many markets by removing boundaries and allowing both banks and FinTechs to compete for incumbents’ customers in their home markets. PSD2 is creating an environment where Digital champions have an opportunity enter and capture market share in neighboring markets, particularly those where there is a gap between customer expectations and incumbents’ digital capabilities. This creates a risk for incumbents that have not kept pace with their customers’ preferences for digital services.

Deloitte "Bank of the future" model

Incumbents and FinTechs will have to answer two key questions
  • What role do banks want to play beyond their traditional value chain/core business?
  • What role do banks want to play in the emerging ecosystems?
  • Framework
  • Digital Champions
  • Digital Latecomers
  • FinTechs
What role do banks want to play beyond their traditional value chain/core business?
Digital banking maturity has become a lynchpin for the medium-term development of the EMEA banking landscape as it evolves toward Open Banking and Beyond Banking. For banks, surviving and thriving in this new era will take a complete understanding of their competitive landscape, encompassing how their functionality compares to their competition as well as how they measure up to customer preferences.
For Digital Latecomers, now is the time to move out of the comfort zone of the traditional banking status quo and start transforming into a platform for services if they do not want to be left behind by more digitally mature incumbents and FinTechs. However, the steep investment required for this transformation may steer some banks to focus on providing only a few banking products and services as a specialized banking provider.
Digital Champions should leverage their strong current position to expand from a banking platform into an exponential platform before other incumbents and FinTechs fill this space. To achieve this, they will need to work closely with financial and non-financial services providers as the level of complexity of this strategic shift will require deep integration with external partners.
FinTechs offering everyday banking services will be face pressure from two sides: in order to not be left behind by digital champions, they will need to develop further in the direction of exponential platforms; and to meet customer demand for more complex banking products, they will need to expand their services in the area of traditional banking. Collaboration with both incumbents and other specialized FinTechs will be a critical success factor. The recent examples of N26 and Revolut demonstrate that FinTechs have these capabilities. It will be critical to maintain flexibility while scaling up their business – an issue which has been a stumbling block for the digital maturity of many incumbents.


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