Only days after it was revealed that Barclays are facing watchdog action over a huge data leak and only two months after RBS and NatWest saw widespread problems with their online banking and banking cards, it seems that many banks are still merely reacting to incidents which highlight insufficient technologies, not actively innovating to improve their service.
Paul Hunt, MD of Phoebus, notes that:
"There are huge rewards available for those that are successful in finding new ways to innovate, taking into account the sheer scale of customer benefits and the chance to acquire that extra competitive advantage. As the digital world continues to grow, making the IT sector one of the most thriving industries, it’s easy to see that the future of the financial sector rests on the power technology has to transform UK businesses. But why are banks progressing so slowly on the technology wave compared to other industries? Banks are incredibly risk averse and aim to avoid failure at all costs. Yet it’s difficult to innovate unless one is willing to take a gamble. Most banks are investing in technology to meet growing regulatory demands or to cut costs, often leading to a lack of investment focussed on innovation, something which is crucial in order to bring real changes in customer experience. "
Banks notwithstanding, however, the financial services industry appears to be embracing new technology at a quicker pace, something Hunt believes will boost engagement with customers.
He said:
"From exploiting the power of big data and the universality of mobile communications, financial services firms can boost their value to customers significantly, while improving efficiency and managing risks effectively. The best path ahead is the one which welcomes modernisation within the financial services sector by delivering more ideas, executing them more quickly and being faster to say no to the ones which do not work.”
