Beyond Technology Adoption, Financial Institutions Have to Innovate and Adopt New Ways of Thinking too, Says Panel
How has the digitalization of finance changed how banks operate and serve their clients? According to a recent panel discussion during BNY Mellon’s inaugural Client Leadership Summit on 28 June 2018 held in Singapore, the recent wave of digitalization in the financial sector has moved the needle quite significantly.
With technology enabling incumbents to innovate at an unprecedented speed, the experts discussed how disruption brought forth by technology advancements has transformed the financial industry with a new combination of disruptors or “ABCDs” – AI, Blockchain, Cloud and Data.
As such, they looked at the need to become more agile and explored one increasingly pressing challenges for banks – namely, finding and retaining employees with the right skillsets.
Queenie Chan, who heads the North Asia market for the secure collaboration platform, Symphony.com, shared that organizations may need to review their talent mix as millennials become the new workforce majority.
“They don’t like emails, but like to chat. They like using social media to express themselves. So, if you give them a more collaborative platform that allows them to communicate in a way they find natural, they tend to be more creative and innovative. We find it’s actually a really good way to rejuvenate your organization and unlock a lot of value from this generation. In some ways, new technology like this can utilize a reverse-mentorship approach where you engage younger employees to mentor senior executives,” she said.
Adding on, Associate Professor Keith Carter from the National University of Singapore’s School of Computing, shared that finding a change strategy that works requires an awareness of how to engage future generations and harness their new strengths. They were born multitasking on screens, listening to music and doing homework at the same time.
“What are we doing when we bring a twenty-something into our environment? We give them one screen, one desk and say ‘here’s your pen and paper, concentrate on one task’ when we should be changing that paradigm. They can consume information in new ways, synthesize together data that is hard for our generation.”
Ultimately, Mr. Carter also stressed that today’s digital-labor hybrid should be perceived as an opportunity and not a threat by banks. “I believe the biggest challenge for banks is being able to bring a change to their culture while really giving people a sense of security. This is not a time –even if you say a computer can replace five of my traders – to actually do that. Instead, it’s a time of unprecedented growth and unprecedented wealth creation from those who have the right capacity and capabilities in place. Uniquely and unexpectedly delight your customers or be replaced.” he said.
The panel also recognized that the rapid pace of innovation in the finance sector meant banks need to approach risk and crisis management differently. Raj Kandasamy, BNY Mellon’s Head of APAC & LatAm Cybersecurity, pointed out that the advancement of digitalization introduced more vulnerabilities and security issues at a faster pace. He made reference to a recent speech by Ravi Menon, Managing Director of the Monetary Authority of Singapore where Mr. Menon likened the potential impact of a future Global Cyber Crisis to that of the Global Financial Crisis in 2008.
“Global economy is experiencing an unprecedented digital revolution. A recent study estimates that by 2025, the global data-sphere will grow to 163 trillion gigabytes from 16.1 trillion gigabytes in 2016. Data privacy, security and hacking risks become especially relevant with this unprecedented digital revolution. We need to consider what should happen in the case of a cyber-attack. First, organizations need to understand the damage and prevent further damage while also ensuring their tested cyber resilience is at work enabling business operations to continue. They also need to ensure they communicate with all the necessary stakeholders, such as senior management, clients and regulators, who would need to be informed. And all of this should happen typically within one to four hours timeframe”, Mr. Kandasamy said.
Hans Brown, BNY Mellon’s Head of International Technology for Asia Pacific & Latin America, is of the view that the business and technology need to tackle the challenges and opportunities brought about by any new technology capability collectively rather than tasking it to a single department. “It should be no different to how you would respond to any change within the organization, the ideal to strive for is to engage the entire organization in innovation, transformation and resiliency, making sure it is engrained into the organization’s muscle memory at all levels. Specifically on cybersecurity; you do drills, frequent practice runs combined with a great staff education program, so it becomes institutionalized and part of everyone’s DNA. That way, teams have effective habits to rely on, reducing response times when called on to deal with an issue.”
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