Disruption in the financial services industry is imminent due to the sweeping tide of tech innovation. Large banks are starting to feel the impact that mortgage and real estate have been feeling for some time. Massive banks and lending organizations have a difficult time moving as quickly as they need to: partly due to their size, and partly due to being entrenched in the way they’ve always operated. Innovations like artificial intelligence, Blockchain and digital mortgages have blindsided a significant portion of the lending sector, but organizations who want to succeed must step up and face today’s technological reality.
Realizing change is necessary is only a preliminary step – identifying issues and removing obstacles must be part of any plan to upgrade and innovate. Fifty-one percent of senior and mid-level financial services managers surveyed on behalf of consulting firm Janeiro Digital said current systems and technology are the biggest impediments to innovation in their organization.
It’s tough to make a sweeping statement that all legacy technology should be scrapped in favor of an entirely new platform. It’s a complex situation that differs from company to company; but you can start by taking your core system and looking at these areas: customer acquisition, customer retention and transactions. Which of these areas are weaker or stronger than the others? Evaluate and see where you need to innovate.
Companies who lack a sense of urgency when it comes to innovation should look at other industries rocked by upstarts who heeded the call for massive change: Uber turned the entire personal transportation industry upside down in a few short years by embracing new technology, and Airbnb is now the largest hospitality company in the world, renting more rooms than many of the major hotel chains. These innovators (and others like them) have this in common: They moved fast, they innovated and they gave customers what they wanted. Don’t let resistance to change or attachment to “the way you’ve always done things” be your undoing.
There will be some instances where a company’s entire system needs to give way to a sweeping upgrade. But in many cases, it will be an evolution. It used to take five years to implement new systems and technology, but it’s generally possible to do so today in a matter of months. Seek solutions that provide flexibility and sustainability and find the balance that works for your company. Don’t delay. Companies that lag behind will get left behind.