Publication

“There have been many attempts by banks to rebuild systems, but
I think we’re in a different place now. New possibilities are on the
table.”
— Participant

Customers’ increasingly demanding preferences and the evolving competitive landscape are putting pressure on banks to be innovative and agile. Despite the capital and energy recently invested in technology, many major banks remain in the early stages of becoming truly digital organizations. To date, investment dollars have focused primarily on enhancing customer service and efficiency, but these improvements have often been layered over or supported by decades-old ‘legacy’ systems that often obstruct the banks’ achieving the full potential of end-to-end digitalization.

As banks face increasing competition with technology-driven companies—new entrants in the industry that are free of the burden of legacy systems—pressure to improve their own capabilities is unrelenting. The advances in computing and telecoms technologies are lowering the costs of major upgrades and will empower incumbent banks to rethink their approaches to digital transformation. Banks are therefore at, or approaching, a tipping point.

On February 27 (London) and March 7 (New York), 2019, BGLN participants met to discuss the ways incumbent banks are approaching what have become fundamental questions: How can banks effectively address core system upgrades? What are the considerations for boards, management teams, and supervisors as firms weigh their options? This ViewPoints synthesizes the key themes which emerged from the discussions in each of these meetings, and from conversations with network participants beforehand and immediately afterwards. These meetings also included discussions on achieving operational resiliency. Themes from those parts of the discussions are summarized in a separate ViewPoints.