Comparative Analysis: Digital Transformation in German vs. French Banks—Lessons for Europe

As Europe’s banking sector accelerates its digital transformation, Germany and France—two of the continent’s largest economies—offer compelling case studies in both convergence and divergence. While both markets face similar pressures from legacy systems, regulatory demands, and the rise of digital-first challengers, their strategies, priorities, and progress reveal important differences. Understanding these nuances is critical for banks across Europe seeking to accelerate their own transformation agendas.

Customer Experience Innovation: Shared Ambition, Distinct Approaches

Both German and French banks recognize that customer experience (CX) is at the heart of digital transformation. However, their approaches to CX innovation differ in meaningful ways:

German Banks:
- 76% of German banking leaders say evolving customer expectations have exposed weaknesses in their current CX, a slightly higher proportion than in France.
- 50% are making community engagement a central pillar of their CX transformation, and 44% are combining customer data across systems to build a richer understanding of customer relationships.
- 37% focus on creating personalized customer journeys, such as tailored marketing and savings tips.
French Banks:
- 69% of French banking leaders admit that evolving customer expectations have exposed weaknesses in their current CX.
- 41% cite developing new financial products and services as their key strategy for improving CX, while 40% are putting community engagement—such as financial literacy tools and remote access—at the center of their transformation.
- 39% are prioritizing new distribution channels for traditional products and services.

Insight: While both markets are investing in omnichannel and personalized experiences, German banks place a stronger emphasis on data integration and community engagement, whereas French banks are more focused on product innovation and new distribution channels.

Operational Agility: Progress and Pain Points

Operational agility is a critical enabler of digital transformation, but both markets face challenges in moving beyond legacy systems and traditional structures.

German Banks:
- 29% have adopted an agile operating model, slightly ahead of France.
- 43% say making their business more agile is the top operational transformation priority, and 34% are prioritizing modern cloud-based core banking systems.
- 35% rank developing new talent as their highest operational transformation priority—more than any other country in the benchmark.
French Banks:
- 26% have adopted a fully agile operating model, and 70% believe legacy systems are hindering their ability to deliver digital experiences.
- 44% are focusing operational transformation on building technology and data platforms, and 34% cite cloud migration as a top priority.
- Talent development is a growing focus, with 33% investing in new talent and 30% in existing talent.

Insight: German banks are marginally ahead in agile adoption and are more focused on talent development as a lever for operational change. French banks, meanwhile, are investing heavily in technology and cloud migration but face greater challenges in unifying strategy across business units.

ESG Commitments: Ambition vs. Action

Environmental, Social, and Governance (ESG) factors are rising up the agenda in both markets, but the level of board-level oversight and integration into strategy varies.

German Banks:
- 60% say ESG is a key driver of digital transformation, and 67% believe their ESG investment strategy gives them a competitive advantage.
- Just 12% have ESG sponsorship and oversight at board level—the lowest among major markets.
- 58% of German banks have made diversity, equity, and inclusion (DEI) commitments, far ahead of France (37%).
French Banks:
- 50% cite ESG and sustainability as their number one priority for the next three years.
- 62% say ESG is a key driver of digital transformation, and 58% have set sustainability financing targets.
- Only 18% have ESG oversight at board level, below the global average.

Insight: Both markets are ambitious in ESG, but there is a notable “say-do” gap, especially at the board level. German banks lead in DEI commitments, while French banks are more likely to set explicit sustainability financing targets.

AI and Cloud Technologies: Adoption and Focus Areas

Artificial intelligence (AI) and cloud technologies are seen as accelerators of transformation, but the focus of investment and use cases differ.

German Banks:
- 47% cite AI and emerging technologies as their top priority for the next three years.
- 50% are pursuing transactional generative AI use cases, and 30% are prioritizing intelligent technologies (AI, ML, RPA) for operational transformation.
- 34% are focused on modern cloud-based core banking systems, similar to France.
French Banks:
- 83% believe AI’s biggest potential is in making processes more efficient and faster.
- 19% of customer experience transformation investment is earmarked for AI and machine learning.
- 67% will prioritize non-customer-facing generative AI over the next three years, with 61% already pursuing use cases in credit analysis, risk, and legal documentation.

Insight: Both markets are moving quickly on AI, with a strong focus on internal, efficiency-driven use cases. French banks are slightly more advanced in prioritizing generative AI for non-customer-facing applications, while German banks are integrating AI as part of a broader push for operational agility.

Key Barriers to Transformation: Data, Skills, and Strategy

German Banks:
- 37% say lack of budget is the biggest barrier, followed by a skills gap (34%) and lack of access to data (34%).
- 37% also highlight the lack of unified strategy as a major hurdle.
French Banks:
- 39% cite lack of access to data as a key challenge, and 37% point to a lack of unified strategy across business units.
- Regulatory and technology challenges are also significant (36%).

Insight: Both markets struggle with data access and unified strategy, but German banks are more likely to cite budget and skills as primary barriers, while French banks are more focused on regulatory and technology hurdles.

How Banks See Themselves: Confidence and Competitiveness

German Banks:
- 76% believe they are ahead in customer experience transformation; 98% feel ahead in innovation.
French Banks:
- 61% believe they are ahead of competitors in transforming customer experiences; 90% feel ahead in innovation for products and services.

Insight: German banks are more confident in their digital transformation progress, particularly in innovation, despite facing similar structural challenges as their French peers.

Actionable Insights for European Banks

Prioritize Data Integration: Both markets highlight data access as a barrier. Investing in modern data architectures and breaking down silos is essential for personalized CX and operational agility.
Accelerate Agile Adoption: German banks’ focus on talent and agile models is yielding results. French banks can benefit from a similar emphasis on cross-functional teams and decentralized structures.
Close the ESG “Say-Do” Gap: Board-level sponsorship and clear metrics are needed to turn ESG ambition into action, especially in France and Germany.
Scale AI and Cloud Investments: Both markets are piloting AI, but scaling successful use cases across the enterprise will be key to unlocking value.
Foster a Unified Strategy: Overcoming internal silos and aligning business units around a shared vision is critical for transformation success.

Conclusion

French and German banks are on parallel journeys toward digital transformation, each with unique strengths and challenges. By learning from each other’s approaches—whether it’s Germany’s focus on talent and agility or France’s drive for product innovation and ESG leadership—banks across Europe can accelerate their own transformation agendas. As the competitive landscape evolves, those that combine customer-centricity, operational agility, and a commitment to innovation will be best positioned to thrive in the digital-first future.

Publicis Sapient stands ready to help banks across Europe navigate these complexities, drawing on deep cross-market expertise to deliver transformation that is both locally relevant and globally competitive.