How do banks thrive amidst the upheavals we see in financial services today?
As the old model of banking struggles to adapt, managed services offer a way for financial institutions to fast-track themselves to a new way of operating that’s fit for the future. Banking will never be the same again. The traditional model – a vertically integrated firm building its own unique technology stack with vendors, and managing third-party software in house – is losing relevance today.
Four drivers are converging to transform the industry:
Accelerating change.
The gradual trickle of change in recent years, for example the shift to digital, has become a flood today. Open banking has not only expanded the possibilities of what a bank can do: it has also opened to the door to agile new entrants who are quick to exploit opportunities across the spectrum of banking activity. Customers have been primed by big technology companies to expect state-of-the-art service and experiences. And with their colossal reach, the big tech companies themselves are fast making inroads into financial services.
Disruption.
Has the banking market ever been subject to so much of it? Banks are squeezed by ever-growing regulation, challenged by cybersecurity threats of increasing sophistication and have to fight harder for scarce talent and resources. Climate risks and the related focus on Environment, Social and Governance (ESG) means banks are looking for the right technologies to support their sustainability agendas. Any disruption, of course, has been amplified by the pandemic.
The drive for efficiency.
As well as reacting as fast as possible to change and disruption, banks are under incessant pressure to find efficiency in everything they do. IT investments are always under the spotlight when there is a drive to reduce TCO: but this becomes an extra challenge when teams are being asked to transform and innovate.
Legacy technology.
Managing existing technologies and upgrades, however they are supplied, ties up valuable in-house resources when banks need to be focused on delivering change
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