By Jerry Young, CEO, ieDigital
As the head of a company which specialises in providing digital transformation services to financial services institutions, it is vital to be aware of the latest cutting-edge developments affecting the financial technology sector.
This includes digesting the results of the latest surveys which come along on a regular basis. One such survey was released just the other day, from Lloyds Bank, which has found that UK financial institutions are increasingly turning to technology to combat the rising costs of living. The study found that 75% of UK financial institutions are expecting costs of operations to rise in the next year due to the cost-of-living crisis, while 72% believe that investing in technology will lessen the effect of cost increases, and it is predicted that 71% of financial organisations will invest in core technology within the next year.
The key takeaway from this is surely that technology is vital.
However, we then turn to a survey from last year, by Accenture, which reveals that only 10% of all banks’ board directors, as well as 10% of CEOs, have any professional technology experience. Furthermore, the survey shows that one-third of banks still have no tech-savvy specialists sitting on the board. Although this survey specifically refers to “leading banks” I would also imagine that smaller banks, or the many building societies that add such an important dimension to the UK’s financial services landscape, are facing the same issue as their bigger colleagues.
As the saying goes, Houston – we have a problem.
On the one hand, technology is being cited as a vital component in the fight against the cost-of-living crisis. However, another survey is showing that much of a bank’s leadership lack experience when it comes to such technology.
It can be understood why there is a lack of technology experience “at the top”. Many banks are having to focus on providing shareholder returns. Against such a backdrop, there is a risk that boardrooms face being bogged down with regulatory administration. Even in today’s digital-focused environment, if a boardroom doesn’t fully understand the nuances of what technology can offer, there is a real risk that they will simply “go digital” without fully understanding what they are doing.
This is not a criticism. Indeed, I can understand why it happens. The important message to highlight is that it isn’t too late for banks, building societies and other institutions that might be suffering from a lack of C-level digital expertise.
Digital transformation is not just about technology. It is also about changing the core of an institution’s culture, systems, organisation, and processes.
It is not simply about turning a huge corporate structure around and heading in another direction – it is about modernising processes that take advantage of its talented workforce. An understanding of how technology works, as well as up-to-date knowledge of trends and breakthroughs, can help build a common direction that is underpinned by people who understand what needs to happen and how technology plays its part.
For those senior financial services personnel from banks and building societies in the UK, whatever their size, who are worried about their lack of technical insights, I would urge them to remember that it is not too late to lead your institution on a digital journey.
Creating digital routes to market is not the complicated, time-consuming process it once was. When it comes to working with a third party to help you implement your digital transformation journey, you should all be working from the same plan. Indeed, part of the third party’s role should include providing the counsel needed to equip the boardroom with the first-hand knowledge they will need to carry on this digital transformation journey.
This symbiotic relationship will ensure that even if a boardroom doesn’t possess actual technical experience, they will soon have important technical knowledge to ensure they are in the best possible place to implement the digital transformation that their customers are demanding.