Digital transformation and partnerships are key themes discussed at the Banking Transformation Summit
I can’t put it off any longer, the day has finally arrived, and probably long overdue, for me to bite the bullet and write my first blog. My key takeaways from last month’s Banking Transformation Summit seem a good place to start.
With new technologies, increasing competition and ever-growing consumer expectations, the finance and banking industry is at the forefront of digital innovation with disruption taking place at every level.
The turbulent financial landscape is bringing about both challenges and opportunities, so I was excited to attend last month’s Banking Transformation Summit as part of London’s 5th Connected World Summit
The event was a great opportunity to discuss the impact of digital transformation on the financial sector and hear from those in the thick of it - not just the established financial institutions but some of the emerging challenger banks and tech visionaries such as Cisco and Microsoft. Thought leaders shared their experiences on developing and implementing a digital strategy and unlocking the value of technologies such as Blockchain, AI, Machine Learning, RPA and Cyber Security.
Many of the financial institutions have, of course, started their digital transformation journeys but this has not been without its challenges and, with many of the disruptors hot on their heels, here are some of my top takeaways from the event on how they need to disrupt or be disrupted.
"Traditional banks can’t afford to get complacent, they need to cater for the new breed of consumers who expect a seamless, simple and engaging digital experience that’s ‘always on’."
Challenger banks are listening to what customers want and are using cutting edge technologies to give it to them. Traditional banks can’t afford to get complacent, they need to cater for the new breed of consumers who expect a seamless, simple and engaging digital experience that’s ‘always on’.
Speed and efficiency
With customers driving the need for speed and convenience, traditional banks need to learn fast and adapt. Onboarding is often time-consuming and cumbersome, many of the challenger banks such as Monzo, Starling and Revolut have got this down to a fine art. Starling claim to “onboard a customer within three and a half minutes” and “aim to get a card to you at home within 48 hours”.
With consumers demanding a seamless digital journey, online engagement is key.
Traditional banks need to be more active in their online presence – it’s the fastest way to reach the modern customer base. An always-on digital first strategy will facilitate an improved customer experience, enhance engagement, generate awareness and reach new audiences.
Challenger banks are out there, and online presence is their word of mouth.
Get your data in order
The challenge for incumbent banks is that whilst they have a lot of data, it’s not readily accessible. It is really important they get their data strategy, data quality and data governance in order and use it to their advantage. Real time data insight is vital to deliver exceptional customer experience.
To attract the very best people requires banks to shift their current culture to a culture that is geared towards attracting transformative talent. Innovation in their core business will be key and they need to accept they’re not just a bank, they’re going to be a tech firm.
But…it’s not all doom and gloom for our traditional banks. Yes, challenger banks are on the rise and shaking up the financial scene, but they won’t be displacing traditional financial institutions just yet.
They may have a great unique solution, but challenger banks need scale to drive their solution forward. Start-ups can benefit from the scale and resources offered by larger established firms.
In addition to big client bases, traditional financial institutions have a brand advantage that brings trust. Some of the new kids on the block are having a harder time convincing the rest of the public to switch from more traditional established bank brands, which have developed long-standing relationships and trust with their consumers.
And bigger financial institutions are not ignoring the disruption signs, they know they need to do things very differently to survive, let alone compete. A few of them are now operating their own internal challenger style brands. This year, for example, RBS group launched their own digital lender called Bó.
For me it is about partnerships – challengers have the innovation, and traditional banks have the loyal customer base. We’ve seen Lloyds invest in UK FinTech Thought Machine; the Barclays Accelerator Programme, powered by Techstars, aims to support start-ups develop their disruptive ideas; and Nationwide has launched a £50 million venture fund, targeting strategic, early-stage investments in FinTech.
It’s clear that partnerships are the springboard for riding the wave of change successfully, whether you’re a multibillion-dollar traditional bank or a start-up looking to bring cutting-edge technology into the mainstream. The battle of the banks will be won by those that can partner, move and adapt the fastest to meet the needs of the consumer in a digital age.
Thanks Banking Transformation Summit for an insightful and thought-provoking event.
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