How Quickly Can Banks Move Towards the Digital Agenda?

How Quickly Can Banks Move Towards the Digital Agenda?

Bradd Lewis

MD & Global Lead, Financial Services Vertical at Dell Technologies

Views 506

How Quickly Can Banks Move Towards the Digital Agenda?

09.11.2016 12:45 pm

The past few years have seen experts repeatedly warn that banks will need to adapt to remain relevant in this fast-changing financial services arena. In order to keep up with fintechs, financial services (FS) organisations will need to ensure that technology and innovation is at the heart of their strategy. As the recent Digital Transformation Index report puts it, industry leaders in today’s digital era proactively drive change and seek to take control of their digital destiny, delivering on the attributes of a digital business as a result. To discuss this further in an open forum environment, we recently gathered senior leaders from across the top global financial institutions to examine some of these issues and carve out recommendations for driving digital in FS.

The reality is that many FS organisations have already taken big steps to ensure they aren’t behind the curve. Last year for example, Goldman Sachs revealed they now employ more programmers and engineers than Facebook, and they aren’t alone. However, an influx of tech talent alone isn’t enough to ensure that banks are moving in the right direction. Part of the problem is that many of their developers are still using their time doing application maintenance on legacy systems, not origin core for new applications. It’s expensive to maintain legacy apps, and the net result is that banks are just spending money on technology – rather than being innovators in terms of how they use it. The main issue is a cultural one, driving change in these cases is all about people and process. So how can you ensure that your organisation truly moves towards the digital agenda?   

1.Ensure your developers are motivated

Developers are one of your most valuable assets and they need to be motivated and incentivised. The way that they are managed can have a huge impact on the organisations digital success. To drive innovation in the financial services, they need be encourage to work creatively and have the freedom to develop products and apps for the business in new environments, while remaining compliant with regulations. The trick is getting the balance right and encouraging innovation in the right direction. Too much standardisation, and you risk your developers jumping ship. Not enough, and you end up with applications which cannot be migrated. 

However, working closely with and motivating developers isn’t always easy, especially given that they are often not based on-site.

2.Drive a culture of collaboration 

Technology companies have a reputation for creating engaging and collaborative workspaces and strong corporate cultures. Take Google for example. Their company culture has been widely documented by the media. However, it’s not just technology companies that could benefit from improved levels of collaboration and employee engagement. Successful innovation depends on effective communication and knowledge-sharing between individuals and teams. Financial services organisation should therefore invest in collaboration tools, such as enterprise social networks, which open new communication channels. We’ve even seen banks looking at how employees use office space, and putting collaboration tools in places where people congregate. Others are looking at heatmaps of their organisation, and analysing which employees are supporting and collaborating with each other. This can help them to understand where content is being generated and where additional collaboration tools are needed. 

One of the biggest inhibitors to progress is the organisational structure – banks are so traditionally set up that it can mean they now struggle to innovate. It’s the people and processes which are both hugely important and the biggest challenge. Changing the team structure could also be helpful. Removing hierarchy and implementing a horizontal structure, where developers work across departments, can also improve collaboration.

3.Get management on-board

Change management processes can often hold back progression. The provisioning time is really quick, but often it’s the business that’s holding people back. It takes a long time to get approvals from the board and the budget committee to get projects moving. This means that timelines become stretched, and projects end up running at between four to six months.  It’s difficult to be innovative and ensure that your organisation is keeping up with the latest developments when the approvals processes are so long. By the time the project has been approved, it is already outdated. Things such as an automated approvals process where boxes can be ticked and certain changes can be automatically approved, would cut the time down from months to hours. However, this needs to come from the top down. There needs to be a culture of trust, where management understand and encourage change and advancement, within agreed parameters.

Looking at the big picture, without real structural change, banks won’t be able to take the next big leap in terms of how they differentiate themselves in the market place or be able to cut costs to drive greater originality. It’s not about legacy technology, good teams will make any technology work, whereas mediocre teams will always encounter issues. If banks want to continue to compete with the fintechs and tech firms, it’s crucial they create a culture which drives innovation, promotes creativity and ensure that the best technology talent will be retained.

Latest blogs

Ian Johnson Marqeta

UK finance finds that 7.4 million in UK living "almost cashless" lives

These findings show that even before COVID-19 struck, digital banking was increasing exponentially. As more people adopt online and mobile banking, the demand for greater personalisation, flexibility and value that consumers expect from their Read more »

Ian Bradbury Fujitsu UK

UK Finance's UK Payment Markets Report - Comment from Fujitsu

Over the past months, businesses have had to rapidly move away from physical cash in order to provide consumers with a safer service. However, this data shows us that a gradual movement away from cash in society started long before the Read more »

James Turner Turner Little

Protecting yourself against a recession

The coronavirus outbreak has spread to businesses, leaving many around the world counting costs. Notoriously, known as the Great Lockdown, it’s been affecting the world economy since early this year. The predicted recession is considered to be the Read more »

Alan Cole JHC Financial

Every Cloud: Covid-19 and the opportunity for digital transformation

Faced with tighter regulations and changing customer needs, over the last decade Wealth Managers have not had it easy – but with the development of new technologies, many have been able to create efficiencies, reduce costs and shrink operational Read more »

Nabeel Irshad Mastercard

Two sides of the same coin: Financial and digital inclusion

The issue of how to tackle financial inclusion has long been a part of the conversation in banking and financial services circles. Regulations have ledto the UK’s biggest banks having to provide ‘basic bank accounts’ to cater for those who do not Read more »

Related Blogs

Chris Skinner The Financial Services Club

Lego Bank is Here, but It’s not Built with Lego

A short time ago, I hosted an interesting group for the Nordic Finance Innovation meetings.  The meeting gathered several of the leading-edge Banking-as-a-Service (BaaS) companies that have launched in the last few years including Bud, Clearbank, Read more »

Chris Skinner The Financial Services Club

The Way We Bank is Radically Changing Too

The British Bankers’ Association released their The Way We Bank annual report last Thursday. It was interesting. Here are the key highlights: Read more »

Chris Skinner The Financial Services Club

How Can a Bank Guarantee its Future?

Three people are chatting in a bar. The first says: “It’s great working for a FinTech start-up as I get to travel the world.  As a result, I can easily call my partner and tell them I’m on a business trip to stay with my other love.” The second says Read more »

Maikki Frisk Mobey Forum

Banks: Be the Change

It’s been 20 years since turned the travel industry upside down. Now Airbnb has done it again. Google, Apple and Here have long since done to TomTom what TomTom itself did to the paper map. Not to mention the changes ushered in by Read more »

David Jones Irdeto

Polish Banks Hack: Quote on the Most Serious Attack To Ever Hit Polish Banking Industry

The Polish banks attack is yet another example of creative cybercriminals leveraging diverse technologies to seed and propagate an attack across multiple banks. As banking systems become more connected or share common access points (such as a Read more »

Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel