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Banks are becoming "museums of technology" says ex-Barclays boss

Banks are becoming "museums of technology" says ex-Barclays boss

Ex-Barclays boss Antony Jenkins has decried banks as "museums of technology" who have failed to properly embrace true digital transformation and are consequently shedding huge numbers of customers to more nimble tech-first rivals.

The former group CEO of Barclays and founder of core banking startup 10x, was speaking on the release of research conducted among 150 senior decision makers and more than 150 product managers, business analysts and project managers, at banks across eight markets.

The study found that banks across the globe are shedding large numbers of their customer base to rivals. One in eight banking leaders (12%) state they have lost 30-40 per cent of their existing customers due to poor customer experience. Across the board, customer attrition rates are running at 20%.

Commenting on the findings, Jenkins says: “Over my career I have learnt banking is about customers, but the reality is most of the banking industry has overlooked what matters, taking a product-focused approach rather than focusing on the customer."

Not only do senior decision makers within banks recognise they are losing valuable customers, but two-thirds (64%) admit that their slow rate of digital transformation has directly resulted in them missing out on winning new customers.

“Banks often mistake transformation for innovation. Innovation is a linear series of marginal improvements, whereas true transformation is a non-linear step-change in improvements, beginning with a material improvement in customer experience. Many banks might convince themselves that releasing an app or going digital means they have been on a journey of transformation, but the reality is that very few banks are undergoing true change at their core.

Banks are museums of technology, with every generation of software and hardware, much of it now off support and towards end of life. Prioritising digital transformation is critical if they want to stay relevant and compete effectively.”

This direct impact on banks’ bottom lines, coupled with the current economic uncertainty within the banking sector, has resulted in three quarters of the banks surveyed attempting to accelerate their digital transformation this year

Says Jenkins: "The industry is really on the brink of having to undergo radical transformation if it's going to remain relevant to its customers."

Comments: (4)

Ainsley Ward
Ainsley Ward - CGI - Glasgow 12 June, 2023, 11:49Be the first to give this comment the thumbs up 0 likes

It's been clear for a number of years that the problem of growing technology debt would come back and haunt banks that have continually invested in minimal compliance rather than modernization. Insights gathered by CGI back up Antony's statements with over 90% of banks believing that back office legacy prevents them accessing the benefits of spend on digitization. It's clear that some will up their game and perform 'lift and shift' migrations to new digital platforms, but we'll also see a big move to BaaS providers as discussed in the recent FCS webinar Financial Cloud Series 2023: Entering new and niche markets with Ba... (finextra.com)

Lance Homer
Lance Homer - Equinix - South Jordan 14 June, 2023, 12:391 like 1 like

The article mentions a study, but doesn't say who conducted the study. I would like to see the data if it is publicly available. Can you provide a link to the study?

Paul Krogdahl
Paul Krogdahl - IBM - Helsinki 14 June, 2023, 13:43Be the first to give this comment the thumbs up 0 likes

Most if not all big banks are a fantastic museum of old technology, and I do not think that is a surprice for anyone within the industry - but some have been better at modernising than others...

Agree with Lance, would be great to get insights on that study.

Philippe Guenet
Philippe Guenet - Henko - Reigate 14 June, 2023, 14:20Be the first to give this comment the thumbs up 0 likes

The culture has not been best in relation to engineering or effectiveness and have allowed much tech debt and operational debt to develop. It seems like it is coming to roost. 

What puzzles me is that Mr Jenkins was at the helm for a good while. So, he holds much responsibility for this "museum of tech". I understand that at that time he had to deal with much of the aftermaths of the financial crisis and whether Barclays was to push Retail or IB more. But surely, digital modernisation was on the cards too. Is this an admission that modernising tech was not done well? 

And what lessons to take from this? Meaningful digital change it is more about organising the collaboration business and technology than strictly delivering technology. And it is typical to keep them at arm's length of each other in banks with a big change function inbetween and many layers of tech management. Are we then admitting that this model does not work and need rethinking?