Some 52% of banking executives expect to be working with new digital partners such as tech startups in the next two years.
According to a survey carried out by Accenture, executives in the banking sector have been quick to recognise that tech innovation is changing their industry at “breakneck speed”.
The report, which is the result of a survey of 300 banking executives from across the globe, also found that 85% of respondents believed that the pace of technological change would increase rapidly over the next three years.
Commenting on the findings, Alan McIntyre, senior managing director, head of Accenture Banking, said: “For banks, building platforms means understanding the privileged place you have earned in the customer ecosystem arising from trust, connectivity or proprietary data and appreciating the value of that position in the market.
“The massive volume of data and existing partnerships that banks already have in place today are assets that banks need to leverage to their advantage in creating new business models. Digital optimization of the traditional bank business model could add five percent to ROEs, but if customers start migrating to new platform-based services outside of the banking sector, increased profitability from a shrinking business will be scant comfort to shareholders,” he added.
Additionally, 46% of respondents said that adopting a platform business model and engaging with digital partners are very critical to their success.
Tech within banks
The survey results also highlighted the need for banks to change the way they interact with technology.
“Implementing the right technologies to achieve digital transformation is only one part of the equation; banks also need to harness technology to enable their people to do the right tasks in a nimble and adaptable environment,” added McIntyre.
Some 74% of participants thought a more liquid workforce would help to improve innovation within the bank.
This liquid workforce, the survey found, would include a mix of traditional employees, on-demand workers, crowd sourcing, application development companies and other external sources, enabling banks to scale talent up and down as needed for greater cost variability and efficiency.
Interestingly, the report also highlighted that automation and AI would become essential for banks. More than 80% of respondents said they thought the widespread use of AI would provide a competitive advantage beyond cost cutting.
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