After a year in which banks have been forced to grapple with the very present challenge of doing business in a pandemic, many are now ready to refocus on coming changes in technology and practice by making themselves "future ready."
Future-ready banking leaders use rich data for decision-making, augmenting workers with technology and employ agile workforce models. As a result, they benefit from higher market valuations, reduced operational costs and the agility to thrive amid uncertainty.
So how can banking leaders adapt to this growing trend and what technologies are at the center of this pandemic-accelerated shift?
In a recent
Banking leaders recognize they have work to do.
Case in point: Only 6% say they are future-ready — while 37% expect to be there by 2023. The vast majority of leaders have little choice but to undertake a no-holds-barred transformation strategy to inject intelligence and digital capabilities into their operations.
Banks have built their historic reputations on being steady and solid — traditionally making incremental improvements to the efficiency of their operations. The pandemic has blown apart their comfort zones, and the demands on them to innovate are never-ending.
Key integrations are vital to accelerated digital transformation.
First, banks need to embrace cloud infrastructure: Future-ready banking leaders integrate cloud-based infrastructures at scale to better manage internal operations and improve customer experiences.
Second, they need to leverage artificial intelligence: AI can support decision-making in banking such as automating tasks during the lending and approval processes and leveraging algorithm-driven chatbots to improve customer experiences.
Finally, they need to automate business processes. Digitizing business processes for better ROI is nothing new, but automation at scale drives better outcomes and augments human workforces, freeing up workers for more complex tasks.
We’ve seen growing adoption of these technologies. For example, a
Aligning business and technology has paid off: The bank accelerated loan approval time by 26% and can disburse loans under $350,000 three times faster than before. In total, the organization saved $20 million and avoided a potential loss of $2 billion.
However, pitfalls remain.
It is hardly surprising banking leaders have so far not taken a top-down, cross-functional view of digital transformation. Ever-changing regulatory environments, fixed cost structures and heavy investment in legacy systems have delayed comprehensive operational change.
Accenture has identified
For example, banking executives can edge closer to becoming future-ready by viewing business and technology as two sides of the same coin, with progress measured by the extent they operate in tandem. An instance demonstrating this is joint governance, where company leaders together create a strategic route aligning technology investments with the business blueprint. We know that in many leading banks the chief technology officer and head of operations now report to a single executive who takes a holistic view of innovation.
In addition, recognizing technology can augment human talent by capitalizing on the combination of human ingenuity and machine intelligence can be a game-changer. The optimal way to widen talent pools is by applying agile workforce strategies, something many banks already understand: By 2023, 98% expect to have adopted these. Finally, supply-chain ecosystems are redefining competitiveness as a function of cooperation, and building partnerships is critically important for banks rethinking how they operate.
Safeguarding the value of assets is a fundamental task of banking, yet many organizations have overlooked their own operational infrastructure as the ground shifts beneath their feet. Banks must evolve fast if they are to stay on top of rapidly changing markets, technology and customer expectations.
Banks have the skills and talent to do so — from a traditional affinity for data to natural inclinations to automate and deepen relationships with customers.
The future, however, demands they apply these strengths in new ways. Becoming future-ready means fully embracing digital capabilities, taking big, bold approaches to transformation — and achieving new levels of operational maturity for true future-readiness.
