The majority of banks are choosing to build their own technology stack, rather than buy solutions from a third party, according to new research.
The findings of the research into corporate banking, by digital business and IT services leader NTT DATA, showed banks are investing in technology solutions to meet growing corporate demand, but that they face a “conundrum” about whether to build or buy when it comes to digitising their platforms.
In its latest report, Global Research into Corporate Banking’s Future 2022, NTT DATA revealed that 61% of banks prefer to build out their own technology stack.
It also found that while the majority of banks are electing to build their own solutions to meet client demands, only 22% are building their solutions from scratch, and that 78% are building upon their current cash forecasting solution.
Among those banks that have chosen to buy tech solutions, 54% are planning to work with a fintech or a third-party provider, while 46% are integrating an off-the-shelf solution.
Miguel Mas Palacios, director of global corporate banking at NTT DATA, said: “There’s a tech stack demand that’s building for banks, and change is being demanded by their clients. The conundrum is whether banks build their own tech, or buy it in.”
The research, which was conducted across 12 countries and among 900 senior decision makers, revealed some regional differences.
In Europe, banks prefer to build their own technology solutions for advanced cash forecasting, in line with the global trend. However, more than a third are looking to fintech providers to support their technology offerings.
In Latin America, the report reveals there is more willingness to trust external providers, with almost half (48%) of banks preferring to buy in a cash forecasting solution.
Palacios added: “We’re seeing the speed of corporate banking is accelerating, and the pace of technology change is increasing too. Banks are investing in new technologies such as AI and automation, all driven by customer demand.”
The report showed that the biggest mismatch in investment expectations between banks and their corporate clients is around sustainability, with 44% of banks prioritising investing in it versus 48% of corporates who would like to see more investment in sustainability.