Seeking Insights At SIBOS

Sibos participants cited regulatory obstacles, skills gaps, outdated ways of working, legacy technologies and core systems, difficulties extracting and analyzing customer data as hurdles to the bold plans for digital transformation.

Image provided by Swift.

During a busy first day of being back at Sibos, the relief at reconnecting in person and bouncing ideas off peers was palpable as financial institutions gathered at Amsterdam’s RAI convention center.

To get a real understanding of what bankers think about themselves, Publicis Sapient launched the Global Banking benchmark Study 2022, which reveals that most banks have made only moderate progress over the last 12 months, piling pressure on them to energize their digital transformation efforts, said Sudeepto Mukherjee,  senior VP EMEA & APAC and banking & insurance lead for Publicis Sapient.

Of the 1000+ senior banking leaders surveyed, 54% are yet to make significant progress on executing their digital transformation plans, while just 20% report having a fully agile operating model.

The survey also shows that 70% of C-level executives believe they are ahead of the competition when it comes to personalizing customer experiences, compared with only 40% of senior managers. Similarly, 64% of C-suite executives believe they are ahead of the competition when it comes to deploying new technologies, compared with just 43% of senior managers, 63% of C-level execs say they are ahead of their peers in developing existing talent to optimize digital transformation, compared with just 43% of senior managers. Mukherjee believes banks need to align this difference in perception to help define future areas of focus.

Looking at the key drivers of transformation, banks pinpoint the need to remain ahead of competitors, which include legacy financial-services peers and digital-first challenger banks as well as businesses such as Apple that have crept into banking from technology, telecommunications, and retail sectors. The need to meet rapidly changing customer expectations, which now are often set by companies outside of financial services, is also a major driver.

Although banks have bold ambitions for digital transformation, the survey finds many hurdles, including regulatory obstacles, skills gaps, outdated ways of working, legacy technologies and core systems, and difficulties extracting and analyzing customer data.

“The most interesting thing for me was a paradox: Banks say they want to modernize the core, they want to get all the data, but then they’re not talking about the hard parts,” Mukherjee said. “You’ve got to change the culture, you must enhance and upgrade your capability, you must put a lot into the foundation. They are talking about the stuff that comes next, but the difficult bits are some of these intangibles.” Mukherjee believes banks must behave more like fintechs to navigate the trickier intangibles and to stop seeing past failures as a barrier to future digital transformation.