A report published today by Information Services Group (ISG) entitled “The 2020 ISG Provider Lens Banking Industry Ecosystem Report for the Nordics”, finds banks in the region need technology to help them manage and consolidate multiple core IT systems in a cost-effective manner.
Jan Erik Aase, director and global leader, ISG Provider Lens Research said: “Untangling these legacy spaghetti systems will be a significant challenge for several large banks in the Nordics. This creates significant opportunities for technology service providers that understand the local market and can consolidate multiple banking platforms efficiently and quickly.”
The report also sees significant interest among Nordic banks in new technologies to improve customer experience, as the region aims to become the world’s first cashless society. Customer experience has become a top priority for many banks, as switching costs for customers plummet, millennial buying power soars and non-traditional banking alternatives proliferate.
Banks are looking to re-think their internal systems to respond quickly to rapidly changing customer needs, tap into emerging FinTech systems and speed up the transition to a cashless world, the report adds. Banks want to digitse the customer experience, but also revamp their backend systems and processes.
The report also finds strong growth in contactless payments in the region this year, driven by the COVID-19 pandemic. As they update their systems, many Nordic banks prefer local service providers that understand regional market dynamics and cultural changes.
In addition, P27, an initiative aims to break down barriers for trade and financial interaction between the Nordic countries, has prompted several banks in the region to build or enable their payment systems to accommodate the P27 roadmap, the report says. Modular solutions and accelerators are becoming common at banks to reduce the time and effort of updating their systems.
In addition, banks in the region are looking to technology service providers to help them with know-your-customer and anti-money laundering regulations, as European authorities step up enforcement of financial crimes, the report says.
Many banks are moving toward automated anti-money laundering checks to improve scaling and speed and to reduce false positives. In some cases, service providers are partnering with smaller FinTech companies to develop integrated solutions.
The report names TietoEVRY as a leader in all four quadrants, and Accenture and TCS as leaders in three. Capgemini is named a leader in two quadrants, and DXC Technology, Infosys, LTI and NETS are named leaders in one.
Infosys was named a Rising Star—companies with “promising portfolios” and “high future potential” by ISG’s definition—in two quadrants, and Capgemini and TCS were named Rising Stars in one quadrant.