Last month Ed Miliband urged UK banks to sell off bank branches as part of the Government efforts to reduce market centralisation and boost competition. As banks are increasingly looking to move to mobile and digital channels and undergo major structural
changes, their shortcomings in terms of technological capabilities are becoming more apparent.
A number of major high street banks hit the media headlines recently with stories about service disruptions and system failures. These incidents exposed the weaknesses in the IT infrastructure in Britain’s top high street banks. One of the major reasons
for these shortcomings is the systematic underinvestment in IT that has plagued the banking sector for years. With regulators and market pressures forcing banks to cut down costs, whilst trying to comply with an increasing number of regulations, it’s not surprising
that IT innovation has been pushed back on the list of priorities of financial organisations. To add further to the dilemma banks face regarding investment in new systems, the majority of their current IT budgets are used in just keeping the existing systems
The lack of sufficient investment in technology innovation has put high street banks in a disadvantaged position compared to emerging start ups which are better positioned to take advantage of disruptive technologies like social media, mobile and the cloud.
According to a recent
report on the future of banking, more than two-thirds of European banking customers will be “self-directed” and highly adapted to the online world in the next five years. However, 90% of European banks currently invest less than 0.5% of their total spend
on digital and have digitised only 20% to 40% of their processes.
So how can banks close this gap between customer expectations and technology capabilities?
To remain competitive in this market, banks will have to embrace digitalisation and technology innovation. This will require making significant changes in front-line tools, internal processes, data assets and staff capabilities and stitching them together
to develop a coherent front-to-back proposition. Banks will also have to fully automate the customer service process across all communication channels to create a seamless digital customer service experience.
The latest advancements in Business Process Management (BPM) technology can help banks achieve these goals, whilst driving down costs and boosting business innovation and customer satisfaction. After all, the biggest cost saving opportunity for banks comes
from automation of servicing and fulfilment processes and migration of front-end activity to digital channels. This will give them a strong competitive edge, whilst putting them in a pole position to take advantage of the great opportunities offered by the
Blog updated: 28 May 2015 02:56:23