Legacy systems are preventing nearly two thirds (61%) of commercial banks from developing Fintech applications, research commissioned by Fintech provider Fraedom has revealed.

The study polled decision-makers in commercial banks including senior managers, middle managers and shareholders.

The research discovered that while inefficient systems are proving most prohibitive in terms of Fintech development, a lack of relevant expertise and access to resources are also significant stumbling blocks receiving 56% and 53% of votes respectively.

Kyle Ferguson, CEO, Fraedom, said: “The research highlights that legacy systems are the most common barrier preventing commercial banks from developing Fintech applications. Trusted Fintech firms offer banks the chance to overcome these in-house challenges and reap the benefits from technical applications that can lead to more revenue making opportunities.”


Subscribe to the Global Banking & Finance Review Newsletter for FREE
Get Access to Exclusive Reports to Save Time & Money

By using this form you agree with the storage and handling of your data by this website. We Will Not Spam, Rent, or Sell Your Information.
All emails include an unsubscribe link. You may opt-out at any time. See our privacy policy.

It was also interesting to discover that Fintech providers were labelled more of a threat by a minority of senior members of staff in commercial banks, with 18% of shareholders believing that they pose a risk to the entire banking industry, a view that was held by just 8% of middle managers.

While a few members of staff are concerned by the rise of Fintech providers, the trend of outsourcing services to Fintechs is ever-present with only 26% of commercial banks not outsourcing any services. In the UK alone, nearly half (46%) of domestic respondents said their bank outsources payment solutions to Fintech providers.

“The commercial banking sector must become more efficient at adopting new technologies. Fintech firms can make a big difference to certain areas, such as commercial cards,” adds Ferguson. “Established Fintech providers are rich with technical expertise and have the in-depth knowledge of  local markets to successfully partner with banks, which is clearly indicated by the research results.”