Banking is an inherently complex industry. But for long the sector has been able to leverage technology to manage business complexity and to drive growth, profitability, customer experience and innovation.

Which is why one particular finding in this year's EFMA-Infosys Innovation in Retail Banking study creates some serious cognitive dissonance - IT systems apparently are the biggest barrier to innovation across all banks, irrespective of size.

How is that even possible when banks outspend almost every other industry on IT infrastructure?

Complexity. Banks spend almost 85% of their annual IT budgets removing kinks and clots in infrastructure or simply keeping it in running condition, with little left to transform the business or create new revenue streams.

But, transform they must to survive in banking's brave new paradigm where the serious threat for conventional banks is from technology companies like Google and Apple determined to redefine the way banking products and services are designed, delivered and experienced by customers. A slew of new technologies like Social, Mobility, Analytics and Cloud have also leveled the playing field for other smaller structurally nimble players to challenge established monoliths. Most importantly, consumers are exercising their newfound collective digital voices to demand choice, personalization and value.

Add to all this a still evolving regulatory regime with compliance standards so demanding as to distress even the most versatile banking infrastructures. Regulators want the macro view and the minutiae and they want it now. The stress of regulatory stipulations on capital & liquidity requirements and fee-based income models is already evident on a lot of banking balance sheets.

Global macroeconomic conditions, in the meanwhile, offer little succor to any industry and least of all to banking.

Given that the rules of engagement in banking have been so comprehensively rewritten, nothing short of a complete transformation of IT infrastructure will help conventional banks compete effectively in the Brave New World of banking. And it's a world where simplicity is the only sophistication required.