Today we live in a global era when the banking system is already starting to fail. Banks are local, and the network is global. This requires a certain digital step from the banking industry. Digitalization means rethinking the bank in the realities of the Internet era. It is changing the business model and corporate culture of the bank, which are now built on the basis of digital platforms.
Think about this for a moment
Since mainly bankers are at the head of banks, this could be a problem for bank innovation. The top management of most banks does not have an engineer in their team. This has to be a person with a digital technology background. A person in charge of digital on-boarding. Therefore, the leadership of such banks believes that digitalization is a project. In each business area, some digital project is created, a leader is assigned and the task of the digital reform is set. This person gathers a team, receives a budget, completes his project, and everything returns back to normal. This has nothing to do with real digitalization and is nothing more than patching holes.
Re-build financial services
Digitalization requires a total rethinking of the bank in the realities of the Internet era. It is changing the business model and corporate culture of the bank, which are now built based on digital platforms. It requires re-imagining how banks will provide high-tech financial services. Bankers see the situation exactly the opposite. They ponder how to apply technology to an existing financial services structure. Why is that? Because bank executives are knowledgeable about risks, government regulations, compliance, accounting, postings, and money. What they don’t understand is technology and the future of banking technology.
How can a bank be re-built technologically, if no one is aware of technology from the top management? This is a matter of principle, which is why there are many digital projects and no company leaders from this area. This should be at least a member of the board of directors. Almost everyone, who is involved in digitalization is subordinate to the operating director or IT director, but not the leader in digitalization. Again, in this case, banks underestimate the need for digital transformation and a person responsible for such reforms. The director of digitalization should be the only top manager directly reporting to the CEO. It can be even the CEO himself if the company is seriously counting on the success of the digital transformation.
At least a quarter of the Top management should be taken by people, who have made a career in digital technology. Today, in senior management, almost 90% of banks do not have a single professional in this industry. This is the path to disaster, especially considering that the banks have no more than five years reserved for structural transformation. Taking into account the EAEU digitalization agenda until 2025.
Advanced in Fintech
If the management team of the bank remains the same, and the employee sincerely believes that the future is behind digital technologies, severe changes need to be made to the work processes of any bank. These can be banks or start-ups led by technologically advanced specialists. Digital vision will not arise where there are no leaders who understand digitalization. Most of the top managers in banks try not to change the ABS because they do not have a common vision. As long as the ground beneath their feet does not burn, you can evade them. Most IT directors have no time to explain things to management. All their resources are used to ensure that the bank continues to function (80% of the budget is spent exactly on this).
Therefore, who will form the concept of digital technologies in the bank if there are only bankers on the board of directors and there is no one to object to them? Key to success is to implement FinTech resources and let the bank industry transform digitally. Artecha expertise allows us to implement these technologies to life and help financial organization digitalize smoothly. Let us know if need any additional information and let you financial company lead the fitter market of banking industry.