Digital transformation is advancing at great speed in the Austrian financial market. Almost all undertakings have integrated digitalisation into their strategy, with almost half (44%) of them – twice as many as in 2018 – having allocated measurable objectives and budget to their digitalisation strategy. The need for external support in the field of Information and Communication Technology (ICT) is increasing, the degree of interconnectedness with external service providers is increasing throughout the entire financial sector, with IT risks increasingly also being outsourced to the interface to third parties. At the same time, the quality of their in-house IT security measures has improved significantly, especially in relation to cyber and cloud security. These are the findings of the FMA’s Study “Digitalisation in the Austrian Financial Market – 2021” that was published today, which builds on the previous edition of the study from 2018, and which is the most comprehensive and at the same time most detailed basis in terms of both data and information with regard To the issue of digitalisation in the Austrian financial market.
“The findings from this study flow into the FMA’s strategy for supervision, and were already taken into account when determining the priorities for supervision in 2022,” emphasised the FMA’s Executive Directors, Helmut Ettl and Eduard Müller: “The finding help us to identify concentration risks and potential channels of contagion, to intensify the monitoring of cyberrisks, to identify and analyse trends and drivers of digitalisation, as well as to create as fair as possible conditions for competition between analogue and digital providers, solutions to problems and products.”
Digital solutions used across all business areas
In recent years the use of cloud services has intensified particularly strongly, which are already used by around three quarters of all supervised entities. As recently as 2018, only 60% of market participants were able to imagine using them within a foreseeable period of time. The usage of “Robotic Process Automation” has increased significantly and is already particularly widely used in banks, where it is already used by around 60%. On the other hand, insurance companies are the pioneers in “machine learning”, used by almost 40% of undertakings, followed by banks with around 30%. Automated data interfaces that promote digital cooperation are already used by around two-thirds of banks and insurers; and such technology is being more frequently used in other sectors.
In total Austria’s financial services providers are currently using more than 3,000 critical IT application to aside their critical business processes. The tend is towards consolidated standardised software that can be deployed for as long a time as possible thanks to updates. As a result the diversity of providers may fall in the long-term and a concentration may emerge with only a few large software developers.
Cautious migration of products and services
A lot of products and services are being adapted step-by-step towards new digital possibilities. The priority remains is migrating traditional products and services to new technologies, rather than creating new and creative digitally native solutions. Digitalisation in sales and customer contact is advancing very rapidly, with increasingly digital channels like social media, chats or video-based communication being used, especially in the pre-sales field. Conventional sales channels are increasingly losing their importance as a result of the use of digital digital distribution platforms, comparison portals and robo advice.
Despite the increasing proliferation of cryptoassets, licensed financial services provider are barely investing in this segment at the moment. This applies for both their own assets, as well as for customer deposits. Blockchain technology has hitherto been unable to establish itself as a basis for new products or services of licensed providers due to outstanding regulatory issues. New impulses are to be expected as a result of the regulatory “Digital Finance Package”, which is currently being negotiated at EU level.
Call for Input: critical discussion and comments gladly received
“We see our study also as the foundation for further discussion about 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 Board. The interested public is therefore invited to submit its comments are remarks to the FMA until 28 February 2022; to be sent to the address [email protected].
The German version of the FMA Study can be downloaded here: Digitalisierung am österreichischen Finanzmarkt 2021 (Format: pdf, Size: 4,3 MB, Language: German)
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43 / (0) 1 / 24959-6006
+43 / (0) 676 / 88 249 516