CEO of leading fintech company Finastra says that European banks are trailing the U.S. in technology adoption, according to a report from CNBC.
Of the world’s top 50 banks, 45 of them are clients of Finastra, a firm whose revenue exceeds $2 billion.
In an interview with CNBC’s “Squawk Box Europe,” Chief Executive Simon Paris described U.S. banks as more willing to embrace fintech than their peers in Europe, and said these earliest investments are already paying off.
“You see a big difference between the U.S. banks and the European banks, and I think that’s part of the reason why U.S. banks are at twice the level of return on equity over the Europeans,” he said.
“What the Americans are doing is investing very heavily in productivity and in the actual service itself, (and enabling) the customer journey. You really see that they’re getting improvements from those technology investments they made a few years ago.”
“What the Americans are doing is investing very heavily in productivity and in the actual service itself, (and enabling) the customer journey. You really see that they’re getting improvements from those technology investments they made a few years ago.”
Rates of adoption depend on the type of fintech technology, according to Paris. He explained to CNBC that technologies with a focus on productivity such as automation are more widely implemented than technology designed for retail banking.
As the use of technology increases in this sector, Paris told CNBC, technology is also being utilized to root out potential abuse.
“The main categories (of banking misdemeanours) are fraud and error, and technology can help in those two areas,” he said to CNBC. “An error could be an example of a ‘fat finger,’ you make a very large trade you didn’t mean to — can you capture that error before the trade occurs? That’s where you can use technologies like machine learning and artificial intelligence.”
