While many banking and capital markets (BCM) businesses are finding it difficult to deliver target returns, others are performing much better.
As PwC’s 21st CEO Survey findings underline, the big differentiator is digital transformation, and the breakthrough innovation and impetus for growth that stem from it. BCM organisations that get this right will find opportunities to positively transform the customer experience and put clear blue water between themselves and competitors.
Driving this type of change is proving exceptionally challenging, however. How can your business get ahead of the pack?
BCM CEOs are bullish about economic growth – 57% believe the global economy will improve over the next 12 months, compared to 30% the year earlier. Yet that economic optimism hasn’t translated into increasing confidence in their own prospects.
So how can businesses get onto a stronger growth footing? Harnessing automation, blockchain and artificial intelligence (AI) can not only drive down costs, but also allow businesses to better serve more customers, optimise trading strategies, and target valuable new segments. Already some investment banks are using advanced technologies to reach into retail markets and offer small businesses services that would once have been reserved for large corporates. In turn, sharper customer intelligence would allow your business to target and tailor solutions more precisely than ever.
While accelerating digital transformation holds the key to boosting innovation, differentiation and growth, many BCM organisations are finding it difficult to get up to speed.
In fact, the pace of technological change is now up there with over-regulation on BCM CEOs’ list of concerns. And as the regulatory overhaul over the past decade has shown, there are no quick solutions to implementing such complex and far-reaching changes to an organisation.
It’s generally not the technology itself that creates the difficulties – systems are becoming more powerful, more intuitive and easier to implement and use. Rather, most of the problems stem from the familiar old snags of process fragmentation and IT incompatibility. Unless these deficiencies are sorted as part of a digital transformation, no amount of investment can deliver real benefits.
Transformation is as much about talent as tech – people, rather than systems, drive innovation and realise its full commercial potential. Yet, less than 20% of BCM CEOs see attracting digital talent as easy. While much of the current focus is on bringing in technology specialists, it’s just as important to ensure that tech awareness permeates the entire organisation, including senior leadership.
Other key questions include how to organise talent as humans and machines begin to work so closely as part of a hybrid workforce. Most BCM CEOs say they are still trying to work out how to make the most of the collaborative potential. When thinking about their people strategy for the digital age, less than half (44%) say they are clear about how robotics and AI can improve customer experience, for example.
Global Banking and Capital Markets Leader, PwC United States
Tel: +1 (646) 471-1425
Financial Services Co-Leader, PwC Japan
Tel: +080 3549 9530
Private Banking and Wealth Management, Co-Leader Strategy&, PwC UK
Tel: +44 (0) 20 7212 5265
FS Leader North America, PwC Strategy& US, PwC United States
Lara De Vido
Senior Manager, Global Financial Services Marketing, PwC United States, PwC United States
Tel: +1 (646) 313 3635