EMEA Digital Banking Maturity Study


EMEA Digital Banking Maturity Study

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

Comprehensive digital maturity study of 248 financial institutions across 38 countries reveals significant gaps – and opportunities.

A mixture of changing consumer preferences, competition from FinTech start-ups, and regulations like the European Union’s revised Payment Services Directive (PSD2) have been forcing banks in Luxembourg as well as abroad to develop their digital capabilities. But not all of them have taken it on board to the same degree. Yet if you ask the banks themselves, nearly each one would consider itself a leader when it comes to digital. So what is the reality?

Banks need to get the full picture for their market positioning so they can understand their next course of action. Whether they should be spending their time and resources on excelling end-to-end on selected customer journeys or only on part of them will determine their future market positions.

Until now, what has been lacking is objective data about how each bank is positioned with respect to its digital offerings, comparing apples to apples by taking into account the full spectrum of products and functionalities, mapped against consumer preferences in each market. That’s where the Deloitte EMEA Digital Banking Maturity project comes in, uncovering a number of surprising findings and serving as a digital playbook for any financial institution looking to come out as a winner in the post-PSD2 new world of banking.

Digital Banking Maturity EMEA

Key findings

  • Digital champions are those financial institutions which offer a wide range of functionalities relevant for customers and a compelling User Experience (UX)
  • EMEA markets can be broadly divided into 4 groups: digital champions, digital smart followers, digital adopters, and digital latecomers
  • Environmental pressure from customer preferences (expectations regarding services) and competitive pressure (digital “arms race” ignited by banks which decide to leverage digital channels as key competitive advantage) is responsible for creating EMEA’s digital champions
  • PSD2 and FinTechs will increase the market pressure, especially in those markets where customer expectations for digital services are already high and incumbents are unable to meet demand
  • Tomorrow’s digital banking champions will be determined by financial institutions’ readiness to offer Open Banking and Beyond Banking services, transforming themselves from a digitized traditional bank into a platform hosting both proprietary and third-party services

Digital Banking Maturity Study EMEA

Download the report (PDF)

About the study

What makes a digital champion? To answer this, we measured financial institutions’ performance across 4 critical areas:

  1. Functionality review of each of the 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.
  2. Customer survey of more than 8,000 clients of banks to understand customer needs and preferences, and to be able to map each bank’s functionality against consumer expectation.
  3. User experience (UX) evaluation of mobile banking by customers according to the User Experience Questionnaire (UEQ) framework to supplement the above.
  4. To provide a snapshot of the results and identify trends in digital banking maturity, the EMEA country-level trends compare the 5 largest banks by asset size of each country. The full study has comprehensive data on 238 banks and 10 FinTechs mapped against customer expectations derived from over 8,000 banking customers surveyed

Status quo no longer an option for Luxembourg banks

Despite some pressure on the banking market, the digital maturity of Luxembourg banks is still lower than the European average, being classified as a “digital adopter” instead of leading the way. Many still have not addressed the digitization pressures from customers and competitors. Luxembourg’s financial sector could be set for a shake-up as customer preferences are evolving and the market position of banks are changing. This combined with digital-first regulation like the revised Payment Services Directive (PSD2) to remove barriers between national markets and allow new entrants with stronger digital competencies to challenge incumbents for market share.