The Austrian Financial Market Authority (FMA) has published a detailed study on digitalisation in the Austrian financial market today. According to the study, Austria’s financial undertakings have a generally positive attitude towards digital transformation: overall they see an opportunity to further develop their business. There is a more mixed picture regarding the status of digitalisation. A large number of undertakings have already positioned themselves in terms of organisation and strategy for the changing environment. Approximately every fifth undertaking is however behind the curve, having barely or even not considered digitalisation at all in their corporate strategy. This study presents a really in-depth overview about the digitalisation of the Austrian financial market for the first time, as the FMA’s Executive Directors Helmut Ettl and Klaus Kumpfmüller emphasise: “Overall we are already observing that undertakings are addressing digital innovation very intensively. Competition is becoming ever stronger and is becoming increasingly global and Austrian undertakings must not be allowed to fall off the pace.”
In this report the FMA has surveyed banks, insurance companies and other financial services providers both about the current status of digitalisation as well as about medium-term planning and expectations in relation to digitalisation. Due to the high level of market coverage reached study, the report is the most in-depth analysis to date about digital transformation in the Austrian financial market. The findings of the report will also feed into the FMA’s supervisory strategy.
The undertakings that are active in the Austrian financial market view digitalisation as being an evolutionary process and do not expect any disruptive changes to the market in the medium-term. By deploying digital technologies, the majority of the undertakings see the opportunity to make business processes more efficient. The potential is particularly being seen in the banking sector to be able to better deal with the wishes of customers by using digital solutions.
The future market environment is viewed very differently by the various sectors. Banks and insurance companies are preparing themselves for competition from global technology companies. However, in contrast, in the investment services sector, FinTechs are perceived as being the main competitors for new clients.
The spreading of individual technologies varies by sector and area of application. The most widespread technologies are digital technologies in the areas of sales and marketing. Around half of the undertakings provide their services through special online portals for customers, with 39% have also developed apps for mobile devices. The use of e-mail will decrease in the future due to reasons relating to data security and data protection. Customer contact using social media is predominantly conducted by insurance companies (70%). It is noticeable that automated advice systems – known as robo-advisers – are barely being developed by the established undertakings, but instead are by and large being developed by FinTechs.
Around half the institutions (48%) have already chosen cloud services for the provision of IT infrastructure and IT services. By 2021 this figure is expected to rise to two-thirds. Using more complex technologies for data analysis purposes are currently an issue for banks and insurance companies. During the next two years, around half of the insurers (46%) and banks (55%) want to deploy machine learning in their productive systems. The application of artificial intelligence (AI) and blockchain technology is currently restricted to isolated cases of application.
For the FMA, this study is only an intermediate status. “We see this study as a foundation for an intensive discussion on digital transformation in the Austrian financial market. We invite all interested parties to react actively, and to submit their opinion regarding the study,” remarked the FMA’s Executive Directors, Helmut Ettl and Klaus Kumpfmüller.
The interested public may submit comments and suggestions to the FMA through its Call for Input until 10 October 2019. Such inputs may be submitted in an informal manner to the address firstname.lastname@example.org.
Link to the Study on “Digitalisation in the Austrian Financial Market” (“Digitalisierung am österreichischen Finanzmarkt”) in German only:
Mr. Stefan Maier
+43/(0)676/882 49 426