This full-day event on Open Banking and the digitisation of financial services focussed on areas including building society strategy, legal liability, technology, and engaging with fintechs. The main debate looked to 2030 and the future of building societies beyond Open Banking, drilling into how they can best adapt to the changing financial services landscape.
Tanya Andreasyan, Editor in Chief at FinTech Futures / Banking Technology introduced the theme of the debate by exploring the word "Legacy" in the banking industry and the impact of the technologies that should be embraced by Building Societies such as the Cloud and Blockchain.
She also pointed out how a focus on Customer Experience and on Digital Development at the forefront of services is fundamental for the future. AI and Machine Learning are technologies everyone needs to keep an eye on. Her tips on how and why to embrace new technology are:
- Make the digital a priority
- Move away from the competitor
- Take no more than 2 years to transform
- Make sure to reach the end of the process
- It can slash financial cost by up to ⅓
We then kicked off the debate with the panelists:
- Penny McLoughlin, Director, Financial Services Marketing, KPMG
- Simon Healy, Industry Director, Financial Services EMEA, Unisys
- David John Gardner, Partner, Technology & IP, TLT LLP
- Mark Lusted, Managing Director, Dock9
1. What five technologies will building societies need to be using by 2030?
There is no doubt that Machine Learning and AI technology will play a significant role in the future of banking and Building Societies. Beyond that, Building Societies need to think how we will enable innovation and leverage its risks.
The key technologies or areas to focus on are data transfer security, the rise of Sup-tech and how Building Societies can better understand and manage their risks. The Customer personalisation that offers more dynamic predictions for users, the omnichannel experiences or platformication that removes the need to embed entities in a system and gives the agility to plug and play, have also been mentioned. How can BS diverge from the algorithm based decision for complex cases where the automated decision isn’t enough? How this same data could then be used in a proximity beacon as soon as the user enters a branch for example?... So advisers can make an effective use of their time.
2. What impact do you think fintechs and big technology companies like Amazon, Google have on building societies?
According to Penny the role that Apple, Google and Amazon play as hyperscale companies is one of delivering a great brand experience. Indeed, that ensures the trust in their brand is stronger than Building Societies and other existing financial providers. This means they’re able to invest as much as they do and that is hard to compete with. In direct opposition to companies that have been around for a very long time and can’t take that level of risk, these companies can fail fast.
A lot of innovation comes from the tech world and they are major enablers in terms of security and tools as they are investing money and resources. According to Simon the opportunity here is for Building Societies to partner with these companies and combine expertise as long you focus on what you want to play with.
The positive side of their impact is giving away technology or charging a small amount for the user and it means that proof of concepts can be tested quickly according to Mark, who mentioned the benefit of using Google Cognitive services as an example.
3. The current next step for many building societies is placing their systems on a cloud based platform – what are the opportunities and risks from this?
The overall benefits are in terms of scalability and the speed to make decisions. However, according to David we are certainly at risk as guidelines no longer leave a degree of certainty as they did a couple of years ago. The key challenge for institutions is the need to think carefully who they partner with and the terms in which they contract with their partners. While Simon agreed that the fundamental concern comes back to security he also points out that there are tools and solutions out there that can create micro segmented security arrangements to stop attacks from spreading through the network once it happens.