In an article for Future Banking magazine, Samuel Brandstätter, CEO and founder of GBTEC (formerly avedos), explores the challenges facing the industry today and how banks can embark on the path to agile business models – with integrated GRC.
The ongoing digitalization, continued spread of blockchain, growing number of fintech startups and intensifying regulatory pressure are just a few of the challenges that are forcing banks to change their existing business models and processes. In the past, banks were the only mediator between parties that transfer values. Today, however, there are new players emerging quickly on the market and taking over the job of banks. To withstand this development, banks will need to be faster and more agile.
How can banks adapt to the changing requirements in this environment?
Traditional banks have undergone many different technological developments and, in doing so, collected a vast legacy of technology. This has led to rigid structures that lack transparency and cannot be broken down and modified in a short period of time. A fintech start-up, in contrast, has the possibility to define processes in advance and begin with significantly less “baggage” weighing it down. Furthermore, it is able to focus on one specific, oftentimes highly profitable aspect of the banking business. Banks are confronted with these competitors and are searching for solutions to address this challenge head on. It is extremely important for them to make wise, careful decisions regarding the areas that require change to increase agility.
One area that has enormous potential for optimization and, therefore, deserves closer attention is the management systems used by banks. These systems, which have barely changed over the years, and are slowing down processes and hampering agility. Management processes that were introduced to meet regulatory requirements often fulfill that exact purpose – yet only that one. The different management systems are frequently not linked with each other and the information cannot be consolidated. Much of that information is also required in several management systems and, therefore, queried and processed in the systems multiple times. This leads to unnecessary, duplicate work that wastes resources and slows down processes. The data is available in the different systems but it cannot be linked together in a useful manner to provide the information needed to make the right decisions.