In today’s increasingly technologically intensive age, banks must quickly make sense of a rush of new technologies that often originate from outside the sector, either from tech giants (Apple Pay, Google Pay or PayPal) or from a class of focused companies known as fintechs. Those that can’t keep pace risk irrelevance — or worse. This series explores the various facets of innovation in the digital era and looks at how banks can navigate going forward.
Technology-driven disruption is now the rule rather than the exception in banking. What started with the advent of online banking has turned the industry upside down with the rollout of the first smartphone in 2007. The combined forces of social media, mobile, analytics and cloud (SMAC) then paved the way for massive changes in the way consumers interacted with banks, and vice versa — at a time when trust in banks was dwindling following the financial crisis. New, more demanding regulations were taking shape. This meant that banks had to quickly adapt their business, technology and operating models and find innovative ways to attract, delight and retain customer trust, while creating new efficiencies.
Today, innovation is on top of banks’ agenda, and it is driven by digitization – which combines omnichannel consistency, big data, analytics, the IoT, robotic process automation and AI to offer deeply personalized services for customers and produce unprecedented changes in the way banking is done. Importantly, the banking sector seems to be moving away from a closed approach to innovation to a more open and collaborative process that aligns customers and employees with emerging technologies developed and road-tested by fintech rivals.