Accenture: Banks fail to achieve peak productivity from tech investments.
A new report has found that scaling digital technologies will be crucial for banks to achieve future readiness while facing rising consumer expectations and more regulatory demands.
Research from Accenture revealed that despite rapid digital acceleration during the global pandemic, most banks have not scaled core technology capabilities, such as cloud, data analytics, and artificial intelligence, placing them behind other industries in terms of operational agility and resilience. While 78 percent of banks broadly use data, few have scaled key enablers, such as analytics (cited by 7 percent) and AI (5 percent), to extract the full value out of data across the customer experience.
Based on a survey of 100 senior-level banking executives, the report assessed the impact of achieving progressive levels of digital and operational maturity with the highest level being “future-ready.” Only 6 percent of banks are “future-ready”. However, Accenture estimates this figure could grow six-fold, to 37 percent, by 2023, providing that banks scale core digital capabilities, such as AI and cloud.
The report found these “future-ready” leaders — which use rich data for decision-making, augment people with technology, and employ agile workforce models — benefit from higher market valuations, reduced operating cost, and the agility to thrive amid uncertainty. These digitally focused banks have benefited from market valuations that, on average, were 18 percent higher than less digitised peers in 2019, and 27 parcent higher in 2020.
“The banking industry has a long history of adapting technology in ways that transform how they operate, interact with customers or increase market share,” said Manish Sharma, group chief executive of Accenture Operations. “These future-ready leaders think big - pivoting from improving incrementally to transforming how the work gets done across technology, processes, and people.”
The research showed that 43 percent of banks expect to scale business-technology collaboration by 2023, up from 11 percent today. Accenture conceded that the banking industry has made some strides in automating transactional tasks in recent years.
A solid 58 percent of banks have achieved wide or full-scale automation of these tasks, a four-fold increase from just 14 percent three years ago. Banks that do this in lockstep with augmenting human talent are expected to achieve wide or full-scale adoption of automation (cited by 90 percent) analytics (90 percent) and AI (85 percent) by 2023.
The consultant concluded that many banks are also adopting an agile workforce strategy to keep up with digital-only competitors and deliver a seamless experience, enabling them to tap into an expanded talent pool and mobilize special talent as needed. More than half of the lenders surveyed use an agile workforce strategy, a number that is expected to grow to 98 percent by 2023. To adapt to changing market expectations, 95 percent of banks plan to scale employee, partner, and customer experience strategies by 2023, up from 61 percent today and 21 percent three years ago.
“To achieve future readiness in an era when people are critical to success, banks will need to use technology to maximise the performance of their workforce,” said Roberto Pagella, who leads banking operations services at Accenture. “Leading banks can harness change by capitalising on the combination of human ingenuity and machine intelligence to transform the way people work and the business performs.”