3. Technology
Since 2008, banks have invested minimally in technology
development as they concentrated on maintaining existing
systems and on core business. However, with a stabilising
economy, the majority of the banks we spoke to have begun
to increase their investment in technology.
While the banks took their eyes off technology, the key
players in the FinTech industry (FinTech companies typically
are involved in technology that connects with or delivers
financial services) began to start challenging them by
introducing new platforms, free as they were of siloed and
legacy IT systems.
Having seen the digitisation of the retail and air travel
industries, customers are demanding similar from other
industries, including banking. It is this customer demand that is
the main push for banks to digitise their product offerings.
It is this same challenge that the FinTech players are meeting
while the banks hesitate. But there is also a technological drive
internally as well, with employees expecting far more from
the technology they are provided with to do their jobs, and
demanding the ability to use their own technology at work.
Many of the banks that we spoke to – in common with large
organisations across many other industries – have siloed,
traditional IT departments who resist such change and are
often one of the main obstacles to digitising the workplace.
But if other sectors which rely on absolute security of
information, and which are highly regulated – including law
firms and pharmaceuticals – are able to adopt more mobile
and cloud-based technologies without compromising their
business or clients, does it follow that so too can the banks?
4. Geography
In an increasingly globalised economy and with BRIC (Brazil,
Russia, India and China) commercial centres rapidly growing
and advancing, global banks are facing geographical
challenges like never before.
Key financial centres of New York, London and Tokyo remain
strong and leave a large gap between themselves and the
new financial centres, with London and New York expected
to remain the top financial centres in the short and medium
future. Westernised economies remain strong because of
the rule of law, low corruption levels and having strong
regulatory environments – but newer centres are increasingly
able to be more flexible to changing circumstances.
Geographical clustering remains the key to success – it drives
a real estate industry that can support the banking industry
with suitable real estate, but it also keeps high concentrations
of talent which can be attracted to the banks, again helping
the industry to thrive. This clustering has led to increased
rents and total occupancy costs, with major financial centres
now in the top 30 most expensive markets out of 138 global
markets
1
, therefore banks are considering moves to less
expensive ‘villages’ like Docklands in London.
Increased real estate costs have also led to the average space
per worker shrinking by 25% from 16.6 sq m (178 sq ft)
to 12 sq m (129 sq ft) globally over the last ten years. Banks
and the financial sector remain significant employers,
attracting 21% of graduates in London and 10% in New
York. How do banks structure themselves such that they
ensure they take advantage of trading in the strongly
regulated top financial centres, as well as increasing their
presence in growing markets?
1. DTZ Research, Global Occupancy Costs – Offices 2014
11
The future of the financial workplace
|
September 2014
