Blog article
See all stories »

Updating management styles: not just technology

"Evolve or become irrelevant" has been the mantra in the banking and finance sector for some time now. Updating legacy systems and transitioning to more agile, innovative technology has been a challenge at the forefront of most banks’ priorities within recent years. 

Developing digital experiences for clients and keeping up with increasing customer expectations is essential. Banks must transition to integrated cloud systems and utilise new innovative technologies such as artificial intelligence, however, updating the technology itself isn’t enough, they must also recognise that moving away from traditional systems is both a technical and a human process. 

The importance of new technologies 

The digital-native structure of fintechs has strengthened their presence within the financial market, creating an increasing sense of urgency for banks to transition to modern processes in order to compete. 

A 2019 Accenture report found UK digital-only banks were set to triple their customer base from 13 million to 35 million, in just 12 months. Additionally, a 2019 survey carried out by Finder supported these findings, highlighting that 12% of British people have switched to digital-only banks, with a further two thirds planning on making the same transition in the future. This suggests traditional banks need to act fast in order to update their legacy systems before the market really explodes.

Banks must digitalise or replace legacy systems and automate processes in order to offer a customer first, secure and personalised banking experience. By embracing innovative technologies like Artificial Intelligence, open APIs and cloud-based systems, traditional banks will be able to stay ahead of challengers and keep up with developments in the banking and finance industry.

A time to transition

There’s an opportunity for banks to utilise the same flexible, agile, seamless and highly personalised services model fintechs continue to offer, reinventing themselves and introducing new ways to appeal to the customer. To create these business models, and stay ahead of the time, it’s important to understand that it’s not just the technology that needs updating but also the organisation itself. 

A popular strategy these days is opening satellite banks for retail and SME offerings. Operating in relative isolation - separated from the incumbent infrastructure - helps launch personalised banking in a fast and agile way. However, innovative core banking has just began to emerge, meaning supporting existing technology with extensive fintech-like banking requirements is a stretch.  

What about updating management styles?

Developing a financial institution presents the challenge of updating legacy systems and implementing new technologies, while integrating data and applications, new ways of working, managing workflows, and new responsibilities and projects. 

Harnessing the benefits of digital and cloud transformation requires organisations to adapt and evolve their delivery models, as well as breaking traditional banking siloes and leadership styles. From junior to senior staff, it is important that all personnel are equipped with the understanding of new technologies implemented within the business, what it’s meant to achieve, and the reasoning behind its implementation.

6613

Comments: (2)

Melvin Haskins
Melvin Haskins - Haston International Limited - 22 April, 2020, 09:22Be the first to give this comment the thumbs up 0 likes

You are not the first to take the Accenture report at face value without asking the right questions. Whilst digital banks are expecting to increase their client base, how many of those clients are just opening a deposit account, attracted by better interest rates than those offered by the big financial institutions. How many of the digital bank clients have closed their accounts with the big finiancial institutions and use the digital bank for all of their banking needs? From what I have read many digital only banks are struggling to make a profit and many will not survive in the UK - N26 was a good example.

Roel Jansen
Roel Jansen - five°degrees - Amsterdam 04 May, 2020, 08:59Be the first to give this comment the thumbs up 0 likes

Hi Melvin, thank you for taking the time to comment on my blog post and for your viewpoint. The switch to customers using neobanks as their primary bank is a gradual process, and one that is gathering momentum as they win trust in the market. Digital banks are expanding their services and are attracting new clients with highly responsive and extended services. 

Research that we commissioned recently entitled "The Rise of the Instant Bank" shows that UK banking customers expect an instant bank account set-up but banks are failing to keep up due to paper processes and digital outages. Banks will only remain relevant if they ensure a digital-first strategy in the provision of their services, and harness the benefits of 'Open Banking' to create products and services that are tailored to the end-user.