How digital integrity and transformation empower retail banks against emerging competitors

By Neil Vernon, chief technology officer, Gresham Technologies

28 April 2021

Retail banks have found themselves at the centre of the digital disruption shaking financial services. As well as direct competition from challenger and neobanks entering the sector, they also have to contend with the likes of Facebook, Amazon and Google and their peers looking to expand their already sizeable footprints into the banking space. This is a scary prospect not only because of the scale of these tech giants, but also their approach to data. With businesses built on gathering customer insights, these firms are uniquely positioned to create innovative new banking and payment products which offer a truly world class customer experience.

So how can incumbents hope to compete? Well, these banks do have powers of their own when it comes to data. The majority of the population in mature markets still conducts the bulk of their financial activity via traditional banking channels, giving their banking providers detailed, valuable insights into customer preferences and behaviour. The challenge for banks lies in being able to access and leverage this data, something with which it has struggled to date.

The difficulty is that many traditional banks are burdened with a difficult combination of outdated, inflexible legacy technology and complex, unstructured data. This means that they are often reliant on manual processes or workarounds which reduce confidence in data integrity –manual processes are highly vulnerable to operational failure or human error. This makes it impossible to aspire to the kind of data-centric business activity and decision making as seen at tech giants.

The solution? Banks simply cannot hope to harness the full power of their data whilst still relying on legacy technology to control it. These solutions, which have often built up over years of organisational complexity and M&A activity, are not only ineffective, they are also crippling banks with excessive running costs and burdening their IT teams – who are needed to support the development of the innovative digital offerings that customers are coming to expect – with breakdowns, maintenance, and custom development requirements. The only cost-effective way of ensuring data integrity is for banks to move away from these legacy solutions towards control platforms which are designed for the digital age. The complex nature of unravelling legacy systems means that many firms are choosing to work with specialist vendors on this to achieve faster time to market and reduce project risk, enabling them to begin closing the gap with the new digital players.

If retail banks are serious about defending their businesses from new competitors they need the speed and agility to keep up with them and achieving this demands a foundation of high quality, accurate data. To succeed, banks must leave their legacy systems behind and embrace the challenge and opportunity of the new digital world.

To discover how Gresham Technologies is delivering digital integrity for the world’s biggest financial institutions, click here.

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