Revealed: Gresham Research Highlights Innovation Shortfall in US Banks

Today, Gresham published new research on the U.S. banking sector that reveals fewer than 1-in-10 banks are at the leading edge of digital transformation. The report, which surveyed 120 banking leaders from across the United States, found the use of outdated technologies and legacy systems is hurting banks’ bottom line, with 74% facing revenue loss at least once per year due to poor data processes.

With 68% of banks now facing regulatory fines at least once per year, due to poor data quality within their organizations, the findings highlight the need for banks to take urgent action to deploy advanced data solutions and increase investment in technology solutions.

The findings beg the question: What can the US banking sector do to embrace innovation? What will the impact be if banks fail to get up to speed? What are some of the simple steps banks can take today to turn the situation around? How can banks overcome reliance on manual, legacy technologies?

The answers to these questions lie in the key report findings, which include:

51% of respondents stated their organization is not highly effective at complying with regulatory requirements.

Regulatory compliance is essential but instead, banks face fines, reputational damage, and revenue loss due to inefficient processes. The US banking sector is falling behind other sectors in financial services when it comes to innovation and effective regulatory reporting. This is leading many banks to fall behind on complete, accurate, and timely reporting for reconciliation; impairing banks' ability to respond effectively to new market opportunities as a result.


68% of banks are susceptible to regulatory fines/penalties at least once per year due to poor data quality within their organizations.

The research revealed the need for banks to increase technology investment to build resilience and avoid regulatory fines. The message is simple: deploying more effective data and technology solutions is the key to getting a grip on the regulatory reporting requirements that come with standardization, thereby protecting brand reputation over time. Modern tooling, such as advanced automation and cloud-based solutions were identified as some of the most effective avenues for banks to supercharge their innovation growth journeys.

The use of outdated legacy technology prevents banks from being confident in their processes.

Over half of the banks surveyed confess to ‘ineffective’ data processes and struggle to meet regulatory requirements. The situation is adding more costs to banks’ bottom line, due to regulatory fines. Outdated legacy systems are also hampering the ability of the US banking sector to defend against external threats and reap new market opportunities, restricting their revenue streams as a result.

Of those ‘lagging behind’ or ‘working to catch up’ on digital transformation, the use of outdated legacy technology prevents banks from being confident in their processes.

In an increasingly competitive field represented by new market entrants in payments, crypto, and fintech, the US banking sector risks being made irrelevant if the current innovation trend continues. The US banking sector can either embrace new technologies or be left in the doldrums by legacy, outdated systems.


Speaking on the publication of the research, Julian Trostinsky, Global Director of Solutions Engineering at Gresham Technologies, said: “The exciting breakthroughs associated with the US economy over the past decade require a resilient banking sector to respond to the plentiful new growth opportunities. The US banking sector must be equipped with the most cutting-edge technology solutions and effective data processes if it is to embrace new market opportunities. This requires an ‘out with the old, and in with the new’ approach to innovation standards and best practices across U.S. banking.”

Jenn McMackin, Global Director of Customer Success at Gresham Technologies, said: “Gresham’s research highlights the reality that US banking is falling behind other corners of global finance when it comes to data transformation. This trend means the US banking sector is at a crossroads: it can either accept the path of innovation and growth by implementing rigorous data standards or be potentially left behind to new market entrants if it sticks to manual, legacy systems.”

The report, which surveyed 120 respondents from the US banking sector, identifies urgent actions senior leadership at US banks should consider to overhaul their data processes. By reading the report, banking leaders will be able to implement the measures that will help them keep pace with industry standards and regulatory requirements.

Download your copy of the report here!


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