SME-focused challenger bank #CivilisedBank is giving up its #banking #license? Yep. The U.K.-based bank announced today that it will release its license and instead focus on building its IT platform. In today’s statement, Chris Jolly, non-executive chairman of said: The Board, with the support of our main shareholder Warwick (Capital Partners, its largest shareholder), has […]
Bank Innovation
The pace of change in Asian #banking #technology is startling. Some of the #leaders — Ant Financial and Tencent — are entering the American marketing, catering to Chinese visitors and students, at least to start.
Financial Technology
EXCLUSIVE— Artificial intelligence can produce the necessary insights #banks need to provide the best experiences to their customers, but these insights depend, at the start, on what type of #data the software is analyzing. “Artificial intelligence is only as good as the data,” Adam Nanjee, senior vice president, digital #banking, for strategic price provider #Zafin […]
Bank Innovation
Melbourne-based challenger bank #Judo #Capital will be focusing its efforts on small business #banking in Australia, according to banking plans unveiled by the challenger yesterday. Judo, which is run by former head of National Australia Bank’s business sector Joseph Healy, has also applied for a full banking license with the #Australian Prudential Regulation Authority, Healy […]
Bank Innovation
#Barclays customers across Europe will not be able to use their mobile #banking app this weekend. The major U.K. bank said it will be switching off access to 24 million customers as the bank restructures itself as required by national regulation. These changes were established by the Bank of England in 2011, and is referred […]
Bank Innovation
As the cliché goes, if you’ve grown tired of the current #banking and #risk climate, give it a few minutes. It’s bound to change.
By the 2020s, Accenture predicts current banking business models to be swept away by a tide of ever-evolving #technology and other rapidly occurring changes. The risk #management function is sure to be pressed to evolve in parallel and it is, according to our 2017 Global Risk Management Study.
In this blog series on banking risk management, I will offer Accenture’s perspective of the changes that have already happened, and those yet to come. I will start with an overview of nearly a decade of risk #challenges facing #banks, and then take a deeper look at the fresh challenges facing banking risk leaders today.
We’ve been studying risk management across financial services—as well as in banking—since our first study debuted in 2009. Then, banking risk managers were reacting to the global crisis, grappled with siloed organizations, with technology not fit for purpose and a shortage in risk resources.
Since then, banking risk leaders have made significant, admirable gains. Moving past the global economic crisis, by 2013 risk leaders began having a direct line to the CEO, even taking a “seat at the table” by 2015.
Meanwhile, pressure mounts with rapidly increasing data volumes and requirements, and organizational analytic capabilities require constant upgrading. Likewise, digital data management and data analysis skills are more in demand than ever, adding to the ongoing talent squeeze.
Our 2017 Global Risk Management Study findings illustrate the rapid pace of change across banking and the risk function, both driven by digital change, digital capabilities and digital competitors. Alongside this change, challenges similar to those from 2009 #remain (see Figure 1). Banks face increasing business pressure to integrate risk and finance functions. They still struggle with talent shortages. From a technology standpoint, change is ongoing, but banks are stretching to use new technology (such as automation and cognitive computing) to full potential.
Additionally, risk managers continue to face conduct risk, reputational risk and strategic risk challenges. Other new risks are still emerging, such as model risk, cyber risk and contagion risk. Complicating matters, the 2017 study finds banking risk leaders facing the #same expectations as their bank peers in terms of driving efficiency and wisely selecting the right people, technology and partnerships to get work done.
In the midst of—and to address—these challenges, banks are in varying stages of experimentation and adoption with cloud, analytics, automation and artificial intelligence. These technologies offer promise, both in terms of innovative, sleek solutions and substantial cost and efficiency gains. Can these technologies deliver beyond their promise?
Our study finds the time for modest change or incremental fixes has passed. True, we might have predicted the steady growth of technologies such as cloud, artificial intelligence and analytics, but the competitive shifts are less expected, and new non-financial risks are a bit of a surprise. But the biggest surprise is the pace of change: more rapid than we might have expected.
What can help banking risk leaders keep pace with constant and rapid change, and fend off new traditional and non-bank competitors? It’s time to innovate. Banking risk leaders may want to carve out a core, proactive strategy that can build risk capabilities overall—now and in an ever-changing future.
Figure 1: Evolution of Risk Management. For more details, view our interactive timeline.
Please join me in my blogs as I share my thoughts on how risk teams can become key organizational leaders by adopting smart technologies, playing the role of integrators of risk within the wider business, and layering existing risk talent to be multi-disciplinarian players and drivers of business value.
The post Banking risk management is changing—but some challenges remain the same appeared first on Accenture Banking Blog.
The acquisition of software provider #Mulesoft by financial #technology provider #Salesforce will go a long way towards opening the #banking ecosystem in the United States, as Salesforce integrates the former’s API #capabilities into its platform. The acquisition, with a potential $ 6.5 billion value, will give Salesforce the ability to use Mulesoft’s API integration engine, which …Read More
Bank Innovation
EXCLUSIVE – There has been plenty of buzz around #voice #banking for some time now, and while many thought 2017 would be the year voice banking made it big, that didn’t happen. And that’s not because the field didn’t make any progress – it did- but the #fintech world had other distractions (hint: #blockchain & …Read More
Bank Innovation
Legendary magician Harry Houdini used to perform spectacular escapes #from handcuffs, straitjackets, ropes and chains, and often combinations of them. One of his most famous and difficult escapes was the 1904 London Daily Mirror Handcuff Challenge, where Houdini managed to escape from a pair of handcuffs that had taken a Birmingham blacksmith five years to perfect.
Many bankers see the traditional application service provider (ASP) #model for managing their #core systems—renting the use of core #banking software centrally hosted and managed by a single vendor—as a set of handcuffs they cannot pick. The ASP model proved useful in the early 2000s in helping #banks lower costs. Yet over the years, the constant adding on of various components (think digital user interfaces or new payment types) atop 30-year-old #technology has created an increasingly complex maze of systems that is now hard to maintain, difficult to integrate, designed for “vanilla” service, slow to change and costly to service. Add to that the frustration of vendor-controlled product releases that can take the #future of banks’ IT innovation out of a CIO’s hands.
If banks are to have a chance of competing for customers’ attention and business against the likes of Amazon, Google, Alibaba, fintechs and others, they must devise a clever escape from the constraints of the ASP model. Digital rivals are built bottom up on IT systems that are open, scalable and flexible, enabling innovative services, high-speed responses and efficient operations. Banks need the same traits to be future #ready—to connect with broader digital ecosystems and deliver hyper-relevant services (financial and non-financial, human- and automation-supported) through multiple and rich channels in real time. Those banks unable to rise to the occasion risk becoming digitally irrelevant and targets for acquisition.
Luckily, the typical ASP model is not escape-proof. While Houdini was an illusionist who used tricks to perform his death-defying feats, banks can take a few well-staged steps to truly #free their core banking systems and become future ready.
It begins with designing the bank’s future-state IT architecture. For the future-ready bank, we envision the ASP model evolving to serve as the engine for Systems of Record, Messaging and Services activity. It will be open, modern, secure and agile enough to allow for seamless integration of applications, API management, Cloud hosting, and plug-and-play of best-of-breed technology. Rather than having the lion’s share of its IT served by a single ASP provider, the bank provider pool becomes more diverse, fluid and adaptable. Then, banks will need to rewire their IT delivery organisation to adopt a multi-speed approach, operating and simultaneously supporting multiple business objectives. They will also need to “hollow out the core” and diversify the providers of IT technology for greater flexibility and innovation. Houdini used keys and cutlery; banks can use processes and technology to free themselves from the handcuffs of the ASP model.
Read our recent report, Breaking Free of the ASP Model, for a closer look at how banks can break free of their ASP model—and how a few banks are already doing it.
The post Free core banking from the ASP model to be future ready appeared first on Accenture Banking Blog.
This post marks the beginning of my career as an Accenture blogger. I’m looking forward to communicating with you in 2018 and beyond and to commenting on developments in the #banking industry in Europe. I joined Accenture late last year as head of the banking practice in Europe. I am an industry veteran with extensive experience both as a consultant and as a banker.
This is an enormously exciting time to be working in the banking industry, particularly in Europe. There is #massive change taking place on many fronts:
As Accenture has noted, most banks in Europe have been vertically integrated, covering all aspects of the value chain from origination to servicing. The universal bank concept is well-established, with the retail sector more stable in recent years than the commercial and investment banking side. Within Europe, there has been more regulation, but regulatory barriers to entry have enabled intra-industry competition. While regulation has deterred cross-industry threats from retailers, telecoms and consumer tech giants, it has also fostered a wide variety of institutions, including private, mutual and cooperative banks.
This is all about to change. The combination of competitive disruption and regulatory actions like PSD2 in Europe and the Open Banking initiative in the UK is forcing banks to open up faster than other industries while maintaining the security that is part of their DNA. Before too long, bank customers will be able to share access to their financial data with non-bank third parties, and third parties will be able to integrate their services with those of a bank to create a better banking experience while keeping client data secure.
#European banks are facing many other challenges, including continuing low levels of profitability and the need to formulate and execute digital strategies. Digital strategies, in turn, call for a new look at how people are selected, trained and motivated as banks shift from product-driven to customer- and people-driven organizations.
I will be writing about these and other topics in the months to come, particularly as they pertain to Accenture’s own vision and its view of banking strategy, #technology and operations. I welcome your comments and questions, and look forward to a lively exchange of ideas.
The post Confronting massive changes in European banking appeared first on Accenture Banking Blog.
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