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For some time, I’ve banged on about banks must redesign for a digital core. It’s no longer a world that can live in a batch overnight update, when real-time everything is here.
This has been shown again and again by outages, and all of the incumbent banks are struggling to move from old world to new. In particular, this world is illustrated by the channel debate. As I keep saying, the use of the word channel is a last century hangover, that describes ‘adding to the branch-based core’.
Channel is from the old world, where we built a bank for the physical distribution of paper in a localised network. Now, we are transforming to the digital distribution of data in a globalised world, we have to redesign that core. Channels are replaced by access points, and the totality underlying these access points is a single, consistent, real-time digital core.
That is the huge challenge for banks: how to move from old core to new core, and how to move from a physical infrastructure to one that is digitalised.
We are launching Digital Bankofficially in the USA over the next few weeks.
September 23rd (Tuesday) in New York;
October 2nd (Thursday) in Boston; and
October 14th (Tuesday) in San Francisco.
If any of my American readers want to come, the official invite is below and just contact us to request attendance.
Tuesday 6:00 – 8:00 PM – Chris Skinner: Digital Bank
Goodwin Procter LLP, Silicon Valley Bank, BlueDun and Bank Innovators Council invite you to join us for an exclusive evening reception with Chris Skinner, author of newly released book, Digital Bank.
The need for innovation in a world where consumers and businesses want digital and virtual access to their money is driving investment in financial technology by many players, including banks and other traditional financial services providers. How customer demand and technology are changing the way we bank and why embracing that change is critical for banks is the subject of a new book, Digital Bank, by thought leader and author Chris Skinner. Please join us for an engaging session with Chris, as he walks us through the ways in which financial services providers of all types are disrupting the world of banking.
Another interesting debate is what drives banks’ investments in technology?
For years, it’s been cost reduction, cost avoidance, regulatory requirements for change, risk management and compliance, competitive imperatives and such like. Not one of these talks about customer needs however.
I’ve been a firm believer that banks rarely invest for revenue uplift and customer service. The reason for this is that it is hard to quantify: this may deliver an extra 1% market share; this could increase customer wallet share by a factor of 2; this is likely to create a 50 basis point improvement in profit per account holding; and so on, do not hold water in the bank’s boardroom.
May, could and likely are not words that deliver a successful business case.
For some years there has been a lot of discussion about which brands consumers trust for banking. Rather than banks, protagonists assert that it’s Apple who could win, as they have the #1 brand with millennials. Alternatively it could just as easily be a Wal*Mart, Virgin, Google or someone else.
For some years, I’ve joined in with these discussions, but I’m not going to anymore.
Just got an email from egress talking about people's attitudes to security. Purely because it's interesting and I've got a lot on the table today, I though it worth sharing with y'all. Hope you like it.
We have a Financial Services Club meeting this Thursday with a panel previewing what we will be talking about at SIBOS. Therefore, I thought I would conclude my background on this to say that it will be all the usual stuff: regulations, regulations and regulations, as discussed in my last post.
Looking at the SIBOS website, it’s clearly going to be the main agenda, as per every SIBOS, but there are some other major nuances outside this agenda that are worth noting.
We have a Financial Services Club meeting this Thursday with a panel previewing what we will be talking about at SIBOS. Therefore, I thought I would provide some background by noting that, for the past few years, we’ve talked a lot at SIBOS about regulations, and this year is no different.
With Dodd-Frank, the Liikanen Report, European Banking Union, the Banking Reform Act and, of course, Basel III reshaping the industry after the crisis, along with specific change structures targeting pieces of the banking system such as the Volcker Rule, MiFID II and PSD2, there has been plenty to talk about.
These things do not go away so I thought that I would give you a quick preview of the regulatory highlights in this year’s agenda for SIBOS September 29 through October 2 in Boston: