3.
Banks cut down on technology innovation and investment
significantly during the financial crisis. A study by McKinsey
on Digital Banking
3
in 2014 found that ‘retail banks had
only digitised 20 to 40% of their processes and that 90%
of European banks invest less than 0.5% of their total
spending on digital.’ As the economy recovers, we have
found a renewed focus on technology in the banks that
we interviewed and predict that digital will increase in
dominance – one investment bank stated that 50% of its staff
were involved in technology.
In turn, the emerging ‘FinTech’ industry is challenging
retail banks by introducing new models based on new
platforms – businesses free of the shackles of legacy IT
and outdated systems. These nimble upstarts pose one
of the most significant challenges to retail banking and as
a result investment in new technology is a priority. Banks
are rapidly developing cloud applications for customer
banking, applications for employees, training programmes
and automation.
3.3.1. Application Based Banking
and Automation
Many of the banks we interviewed told us that automation is
high up on their agenda to improve the customer experience.
To this end, there is a phenomenal amount of growth in the
use of mobile applications for banking by customers of all of
the big players. Of the banks we interviewed, an average of
two mobile or web-based applications have been launched,
and most are looking to increase this as they ramp up
investment and innovation in technology.
One of the main barriers to this innovation are siloed
IT departments – typically a legacy of acquisitions and
restructuring, as well as regulatory compliance. Where
possible, the leading banks are beginning to break down
these siloed workplaces and IT systems as a way to drive
innovation and efficiency. Organisations must strike the
right balance between the organisational efficiency which
necessitates multiple silos and the increasing necessity to
break down barriers to innovation that are preventing growth
and falling behind the expectations of the customer.
Customers are demanding increasingly accessible and
integrated services which they can access on their mobile
device at any time. By placing the customer at the centre
of the organisational structure, rather than the product or
organisational view, banks can make structural changes to
overcome barriers to innovation.
3.3. Technology
24
The future of the financial workplace
|
September 2014
