For the people working in 'digital transformation' functions in investment banks, 2021 is a year of promise. - If there were any lingering doubts about the need for automation, the pandemic has cast them aside, and even if hasn't the need to cut costs should have a similar effect anyway. Finally, the layers of people thwarting their ambitions will be removed.
At least this is the big hope.
"I can manage the technology, but the big issue in banks is the people," says a head of global digital delivery at a major bank. "People in banking can become very institutionalized - they have the wrong mindset. You get senior people who have been around for decades and they're very uncomfortable with change. I come from an entrepreneurial background and it can be very difficult to push anything through."
It's an accusation that's been leveled before. While banks openly espouse digital transformation projects like Citi's new push to digitalize electronic trading platforms, in practice many incumbent business leaders in the industry come from a non-tech background. Banks like Deutsche Bank and HSBC have lost 'digital evangelists' who've become frustrated with the slow pace of change, even while senior management talk the talk of a digital revolution.
"We're bullied," says the head of digital delivery. "I love technology, but people in the business don't understand and there is a culture of bullying people who seem to be a threat."
With banks compelled to cut costs harder and faster as a result of the virus, banks' digital 'gurus' are hopeful these "blockers" will finally be dispensed with. "Past innovation is helping us a lot in the current crisis," says a managing director in the digital team at another bank, who says this bodes well for the future. "These people need to be cleared out," says the head of digital delivery, more explicitly. "Banks need to wake up to the fact that clients are becoming more interested in the quality of the service than in sticking with their historic service providers. - There are big opportunities for fintechs to disrupt incumbents' business models and banks need to change."
The downside for the digital evangelists is that there will also be less money after the pandemic. An MD charged with digitalizing trading processes predicts that there will be more focus on cost and "less propensity to take risks" in future. Digital automation projects will need to be no-brainers with short time horizons, he says. Anything that allows for remote working and remote locations will be sped-up, with sales trading roles at the forefront of the push.
As a result digital gurus may also have to rein their ambitions - and to get used to 'making do'. "There won't be absolute expansion of technology headcount in banks for a while," predicts the MD. "We're probably looking at reallocating developers from other projects."
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