After a recent crisis swept the banking sector across the world, toppling several major financial institutions, the former CEO of United Kingdom-based investment banking giant Barclays has warned about banks failing to properly recognize the value of digital transformation in today’s business landscape.
Indeed, Antony Jenkins, the former group CEO of Barclays and founder of core banking startup 10x, has stated that banks were becoming “museums of technology” as he commented on a recent study across the banking industry, Finextra reported on June 12.
Specifically, the study, which covered 300 senior decision-makers and product managers in banks across eight markets, has found that one in eight banking leaders (12%) said they lost 30-40% of their clients to poor customer experience, whereas, across the board, these rates were running at 20%.
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On top of that, two-thirds of interviewed senior decision-makers have admitted that their companies’ slow rate of digital transformation has directly caused them to miss out on the chance to onboard new customers. As Jenkins pointed out:
“Banks are museums of technology, with every generation of software and hardware, much of it now off support and towards end of life. Prioritizing digital transformation is critical if they want to stay relevant and compete effectively.”
Problems in banks
According to Jenkins, the main problem is that many participants in the banking industry are assigning higher importance to their product offering, “taking a product-focused approach rather than focusing on the customer,” the aspect that matters the most.
In his words, “banks often mistake transformation for innovation,” which is “a linear series of marginal improvements, whereas true transformation is a non-linear step-change in improvements, beginning with a material improvement in customer experience.”
“Many banks might convince themselves that releasing an app or going digital means they have been on a journey of transformation, but the reality is that very few banks are undergoing true change at their core.”
With this in mind, Jenkins believes that the banking industry ought to undergo a “radical transformation” if it aims to stay relevant to its current and potential customers and simultaneously preserve positive bottom lines amid economic uncertainty.