New technologies such as artificial intelligence and machine learning have become bigger challenges than regulatory changes for retail banks, according to a survey conducted by Economist Intelligence Unit (EIU) for Temenos, a banking software company.

About 58% of respondents in the survey said “changing customer behavior and demands” will have the biggest impact on retail banks in the years to 2020, Temenos said, citing a survey of 400 senior banking executives across the globe.

For the first time over the past five years, “technology and digital” (48%) are now bigger trends than “regulatory fines and recompense orders” (43%).

To tackle these challenges, 52% of respondents believe that banks should improve product agility, while 45% said banks should migrate client usage to digital from physical channels.

Retail banks should make use of fintech to provide the services that accommodate their lifestyle needs, said Renee Friedman, the editor of the report from the Economist Intelligence Unit. Banks are encouraged to redefine their business models in the new application programming interface (API) economy, said David Arnott, chief executive at Temenos.

According to the survey, AI is becoming a key part of the new technology mix, but only 22% of respondents think it will improve the user experience.

About 71% of respondents have their digital investment focusing on “cyber security,” followed by “individual delivery capabilities through mobile devices” (54%) and “cloud-based technologies” (48%).