The digital transformation of European banks continues with banks projected to spend in excess of €62 billion on IT in 2017.
New technologies in a variety of fields provide banks with the opportunity to increase their revenue and reduce cost, especially important in an increasingly regulated environment. According to McKinsey, upwards of 30% of costs can be eliminated by digitalisation.
By 2018, banks in Western Europe are estimated to receive over half of new revenue from digital sales.
These developments are also beginning to appear in consumer’s expectations and behaviour. According to the Commission, in 2016, 45% of consumers in the EU-28 had purchased a good online within the past three months, an 88% increase from 2008.
Digital banking services remain a strategic priority for European banks, with 61% of European banking executives viewing investments in technology as very important.
The internet, cloud-based solutions, and the mobile phone are the primary drivers of these innovations. But the rise of machine learning, artificial intelligence, and the internet of things (IoT) provide interesting opportunities for future developments.
Challenges do remain. Differing tax systems within the EU, as well as significant discrepancies between countries in their adoption of these technologies, provide room for future improvement.
Banks are also finding solutions to speed up their payments’ processing systems. Driven by EU regulatory frameworks (PSD2), European banks are leading globally in terms of the implementation of real-time payments.
Policy changes could also help foster growth. Notably, the creation of a Digital Single Market could create over €415 billion in additional growth and 3.8 million new jobs in the EU.
 CBR (2015). European bank IT spending gaining momentum by 2017. Retrieved from: http://www.cbronline.com/news/european-bank-it-spending-gaining-momentum-by-2017-4511839/
 McKinsey (2016). Strategic choices for banks in the digital age. Retrieved from: http://www.mckinsey.com/industries/financial-services/our-insights/strategic-choices-for-banks-in-the-digital-age
 Ernst & Young (2016). European banks reposition for a long-term environment of low growth. Retrieved from: http://www.ey.com/Publication/vwLUAssets/EY-ebb-2016-infographic/$FILE/ey-ebb-2016-infographic.pdf
 European Commission (2015). EU Digital Single Market: a Strategy to build and sustain Trust. Retrieved from: http://ec.europa.eu/justice/newsroom/news/150429_en.htm