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Technology disruption and the future of wholesale banking

Rapid technology advances are reshaping the entire banking ecosystem, and wholesale banking is not immune.

Client expectations are being influenced by new technology. Drawing on experiences with providers throughout the digital economy, clients now expect simple, consistent digital experiences that allow them to perform key transactions seamlessly from any electronic channel.

New FinTech competitors have entered the financial services marketplace with several advantages. Highly scalable cloud-based infrastructure makes it easier for innovators to capitalize upon a new idea. At the same time, the widespread adoption of powerful smartphones puts a broad client base within the immediate reach of new and integrated services powered by intelligent analytics and location-enabled personalization.

FinTech strengths vs. bank weaknesses

(% of executives: responding agree or strongly agree)

EY - FinTech strengths vs. bank weaknesses

Source: The Economist Intelligence Unit © November 2015 The Financial Brand

Investments in FinTech have grown exponentially, with private equity firms and hedge firms ramping up their investments into money transfer and payments, savings and investments, insurance and borrowing.

Key questions and opportunities for wholesale banks

IT Spending

US banks have had to increase IT spending in response to these new FinTech challenges and investments and, in doing so, have focused on three areas:

  1. 1. Banks are driving higher operational efficiency by simplifying document management, workflow and business processes. These initiatives include better data management to facilitate regulatory compliance and reporting.
  2. 2. Banks are aiming to improve digital solutions and the overall client experience. This involves seamless unification across channels to deliver an “omnichannel” client experience, with a “single view of the client” that assists employees with serving and selling. Successful integration of digital channels promises to reduce costs and increase return on equity.
  3. 3. Banks have had to respond to challenging new cybersecurity threats by improving privacy and data protection measures.


Global banks have taken the following four strategies in the wake of the FinTech innovation:

  1. 1. Custom build: banks have pursued internal innovation projects related to areas such as digital transformation and process automation.
  2. 2. Acquisition/partnership: banks can purchase FinTech innovation outright.
  3. 3. Venture capital (VC): banks can provide capital to start-ups through strategic investment funds in areas ranging from digital delivery and online lending to online investment and big data analytics.
  4. 4. Incubator: banks can search for disruptive solutions and innovations by providing not only capital, but also mentoring, workshops, networking events and interim office space.

Four key strategies for adopting FinTech innovations now and moving forward

The four primary strategies for banks to adopt FinTech innovations require varying levels of investment and offer different levels and speeds of return.

EY - Four key strategies for adopting FinTech innovations now and moving forward

How can EY help?

EY is a leader in blockchain technology and in the FinTech industry. EY has launched its global network of growth and innovation centers to help clients catch the next wave in radical breakthroughs in business transformation by tapping into innovative thinking across EY disciplines, experience and industry sectors. In addition, we have several active partnerships and collaborations within the FinTech industry, both as an investor and an innovator. We continually monitor the market for potential innovations. This market research enables companies to support or accelerate the achievement of specific elements of their strategic plan.

Contact us

EY - Ryan Battles

Ryan Battles
Ernst & Young LLP
+1 704 258 7756

EY - Matt Cox

Matt Cox
Ernst & Young LLP
+1 704 280 4327

EY - Angus Champion de Crespigny

Angus Champion de Crespigny
Senior Manager,
Ernst & Young LLP
+1 212 773 6717

EY - David Demsko

David Demsko
Senior Manager,
Ernst & Young LLP
+1 704 338 0671

EY - David Heiner

David Heiner
Senior Manager,
Ernst & Young LLP
+1 212 773 6074