The financial services industry is encountering significant pressure as competitive, innovative, and compliance-based forces continue to increase their impact on institutions. As a result, the imperative to evolve has found itself as a top priority among large, established banks.
A recent report from ORX found that from 100-member financial institutions worldwide in 2019, there were 59,437 reported operational loss events for a gross loss of €15.8bn. While many are likely to pin the blame of this loss on faulty technology or processes, the widening divide between operations and IT is increasingly recognised as being at the heart of the problem.
This unmitigated dedication to innovation and defense against competition has created an unbalanced focus on margin and revenue growth, while the pursuit of improved operational systems has fallen down the list of priorities. A disconnect between the overall pursuit of progress and a banks’ ability to implement innovations with effective operational process has emerged as a consequence, and this poses a risk of margin erosion due to operational losses.
Doggedly pursuing operational processes ‘because this is how it has always been done’ must be abandoned, and a new mindset which is open to embracing new solutions and technologies is essential, if traditional firms are to overhaul their operations and compete in a new digital age.
Sign up for this Finextra webinar, hosted in association with Smartstream, to join our panel of industry experts as they discuss the following topics:
- How has the regulatory climate impacted financial institutions’ ability to innovate?
- How do we begin to quantify ‘operational debt’ and how is it impacting the bottom line?
- Where are the hurdles in banks’ legacy systems that cause the most significant challenge for overhauling operational processes?
- How can organisations leverage technological opportunities to improve their legacy operational processes?