From buying music to catching up on the news, technology has transformed the way we consume products and services. The same is true in banking.
Many customers still want to be able to visit a branch or use phone banking to manage their money. But the average customer now does this far less frequently than 10 or even five years ago, with more and more using mobile apps to access their accounts, check balances and make payments.
Banks are increasingly working with, and in some cases investing in, technology companies
The challenge for banks has been how to harness and develop digital technology to fulfil their traditional role more effectively. That’s not always straightforward. After all, technology companies thrive on innovation and taking risks. Banks, meanwhile, have a duty to be more conservative as they focus on looking after other people’s money.
Rather than trying to invent technology, banks are increasingly working with, and in some cases investing in, technology companies. The results of these collaborations have been impressive.
New services such as contactless payments, for example, are making it easier for shoppers around the world to purchase goods and services. Online systems are helping business customers to manage their payments, cash flow and assets more conveniently.
Fingerprint ID and voice recognition software is enabling bank customers to access their money quickly and easily while maintaining high levels of security. And banks and technology companies have together shown that blockchain technology can be applied to make trade finance quicker and more convenient for exporters and importers.
Turning a big idea into a business
HSBC is supporting the next generation of digital entrepreneurs and helping financial technology businesses to grow.
The bank is one of 23 financial services firms involved in FinTech Innovation Lab, an incubator and accelerator programme run by Accenture that helps entrepreneurs and early-stage financial technology start-ups to turn their ideas into businesses.
Successful applicants explain their ideas to potential backers at special pitch events. Entrepreneurs are then mentored by financial institutions who, in some cases, go on to invest in the companies. The next pitch event is being hosted by HSBC at its headquarters in London on 7 February.
Banks are also teaming up with government bodies and academic institutions. HSBC, for example, last year agreed a partnership with the London-based Alan Turing Institute, the UK’s new national centre for data science, to work with scientists from universities across the country using big data analytics to better understand economic trends.
The significant investment that banks have made in new technology also includes attracting a different kind of person. Banks are employing talented technology experts in growing numbers. They are also mentoring and working with the next generation of inventors and entrepreneurs so that they can keep pace with changing consumer tastes and developments in technology.
So far digital advances have created some incredible opportunities for banks. Technology will continue to help banks evolve in the future. Much more can be done to make processes simpler and quicker, automating tasks such as data entry so that people can focus on more complex and interesting jobs.
As an industry, banking needs to be bolder, move faster and go further: and the fact that banks are building closer partnerships with technology specialists should enable them to continue to do this.