While facing challenges on multiple fronts, report findings declared that changing customer behaviors and demands should be fueling change in the service and products retail banks are offering. Those assertions arrived as part of an in-depth study released on Wednesday by banking software company Temenos.

The report, written by the Economist Intelligence Unit (EIU) on behalf of Temenos and titled, "Whose customer are you? The reality of digital banking in North America," explored the developing fintech situation for retail banks in North America.

The regional report emphasized the need for North American retail banks to further embrace change by developing their digital marketing and engagement (cited by 53 percent of respondents) and improving product agility (cited by 49 percent).

The report also noted that when it comes to preparing for digital change, American banks, in particular, need to examine the experiences of Europe and Asia-Pacific in creating a one-stop digital journey for their customers. Authors found that those institutions with a global footprint especially can learn from Europe's open banking experience.

Although concerns about regulatory fines and recompense orders are higher in North America (56 percent versus 43 percent globally), the report pointed out there is space for banks to work together to overcome the confusing mesh of federal and state regulations.

The report goes on to note that banks in North America are already beginning to come together to collaborate — a necessary effort in order to build a truly modern banking system that supports innovation.

“North American banks need to be able to respond better to how their customers live now in terms of their digital offerings if they are to remain truly competitive against neo and challenger banks,” said Renee Friedman, editor of the report from the Economist Intelligence Unit.

Other key report highlights included:

—North American bankers see their current business model evolving to develop niche propositions for their clients, more so than their global counterparts do (71 percent versus 61 percent).

—More North American bankers (87 percent) believe that the platformization of banking and other services through a single-entry point will steer the market than their global counterparts (78 percent).

—Retail banks across North America are focusing their digital investment on cyber security (76 percent).

—North American bankers consider conforming to data protection and privacy regulation to be the biggest challenge their company faces concerning data and third-party access (31 percent versus 21 percent globally).

—North American banks’ innovation strategies are focused on investing in fintech start-ups (54 percent).

The Economist Intelligence Unit surveyed 400 global banking executives about the challenges retail banks expect to face between now and 2020, and the strategies they are deploying in response. Orchestrators said 51 percent of respondents were at C-Suite level and 10 percent were board members.

The North America report was based on 100 respondents from North America (the U.S. and Canada) and was supplemented with in-depth interviews with senior executives from leading regional banks.

“Though we have strict regulations in place, nevertheless disruption is happening here in North America. We are seeing exciting developments across the region as the banking industry explores what it means to bank in a digital world,” said Emily Steele, Temenos’ president for North America.

“Incumbent banks are setting up digital banks alongside their own operations, challenger banks are popping up, and now we are starting to see fintechs moving to become banks themselves,” Steele continued.

“Banks are awakening to the need to personalize and contextualize their digital products and services, and offer customers great customer journeys, in order to compete and remain successful,” she went on to say.

The entire report can be downloaded here.