Banks must extend and scale digital technologies across operations to achieve future-readiness while facing rising consumer expectations and regulatory requirements
Banks must extend and scale digital technologies across operations to achieve future-readiness while facing rising consumer expectations and regulatory requirements, according to an Accenture study.
Despite rapid digital acceleration during COVID-19, most banks have not scaled core technology capabilities, such as cloud, data analytics and Artificial Intelligence (AI), placing them behind other industries in terms of operational agility and resilience. While 78% of banks broadly use data, few have scaled key enablers, such as analytics (cited by 7%) and AI (5%), to extract the full value out of data across the customer experience.
Based on a survey of 100 senior-level banking executives and externally validated financial data, the report assessed the impact of achieving progressive levels of digital and operational maturity with the highest level being “future-ready.” Only 6% of banks are currently categorized as “future-ready;” however, Accenture estimates this figure could grow six-fold, to 37%, by 2023, providing that banks scale core digital capabilities, such as AI and cloud.
The report found these “future-ready” leaders — which use rich data for decision-making, augment people with technology and employ agile workforce models — benefit from higher market valuations, reduced operating cost and the agility to thrive amid uncertainty. These digitally-focused banks have benefited from market valuations that, on average, were 18% higher than less digitized peers in 2019, and 27% higher in 2020.
“The banking industry has a long history of adapting technology in ways that transform how they operate, interact with customers or increase market share,” said Manish Sharma, group chief executive of Accenture Operations. “These future-ready leaders think big — pivoting from improving incrementally to transforming how the work gets done across technology, processes and people.”
To enable better use of expert talent and technology, 43% of banks expect to scale business-technology collaboration by 2023, up from 11% today. A key example is the progress the banking industry has made in automating transactional tasks in recent years. Nearly three-fifths (58%) of banks have achieved wide or full-scale automation of these tasks, a four-fold increase from just 14% three years ago. Banks that do this in lockstep with augmenting human talent are expected to achieve wide or full-scale adoption of automation (cited by 90) analytics (90%) and AI (85%) by 2023.
Many banks are also adopting an agile workforce strategy to keep up with digital-only competitors and deliver a seamless experience, enabling them to tap into an expanded talent pool and mobilize special talent as needed. More than half (56%) of banks widely use an agile workforce strategy, a number that is expected to grow to 98% by 2023. To adapt to changing market expectations, 95% of banks plan to scale employee, partner and customer experience strategies by 2023, up from the 61% today and 21% three years ago.
“To achieve future readiness in an era when people are critical to success, banks will need to use technology to maximize the performance of their workforce,” said Roberto Pagella, who leads banking operations services at Accenture. “Leading banks can harness change by capitalizing on the combination of human ingenuity and machine intelligence to transform the way people work and the business performs.”