European banks are lagging behind the U.S. when it comes to embracing technology, according the CEO of leading fintech (financial technology) firm Finastra.
The firm works with 45 of the world’s top 50 banks and has revenues in excess of $2 billion.
Chief Executive Simon Paris told CNBC’s “Squawk Box Europe” on Monday that U.S. banks had embraced fintech more rapidly than their European counterparts, and were already seeing the benefits of their earlier investments.
“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.”
Paris also explained that certain areas of technology had been more widely adopted in the banking sector than expected. While technologies that improved productivity — such as automation — have been implemented on a wide scale, technology designed for the retail banking space has been slower to take off than expected, he said.