Banks looking at in-house innovation to meet digital needs

Many institutions in the banking sector are choosing to build their own innovative tech solutions to meet customers’ digital needs, new research has revealed.

 

Research into corporate banking by NTT Data has found that banks are investing in technology solutions in vastly different from as recently as two years ago, with digital ways of working changing client expectations. The report outlined a major dilemma faced by banks in response to the increasing corporate demand for tech solutions. As a result, more banks than ever are looking to digitise their platforms, with 61% preferring to build out their own technology stack, rather than buy technology solutions from a third party.

 

NTT Data’s report, Global Research into Corporate Banking’s Future 2022, surveyed banking respondents across the globe and examined the state of corporate banking following the COVID-19 pandemic. The build versus buy debate formed a significant part of the report, detailing how banks have responded to the growing corporate demand for tech solutions. 

 

While the majority of banks are electing to build their own solutions to meet client demands, only 22% are building their solutions from scratch whilst 78% are building upon their current cash forecasting solution. For those electing to buy tech solutions, 54% are planning to work with fintech or a third-party provider, whilst 46% are integrating an off-the-shelf solution. 

 

In Europe, the preferred option is to build their own technology solutions for advanced cash forecasting, matching global trends, while over a third are looking to fintech providers to support their technology offerings. Conversely, in LATAM, there is more willingness to trust external providers, with almost half (48%) of banks preferring to buy in a cash forecasting solution.

 

“There’s a tech stack demand that’s building for banks, and change is being demanded by their clients,” commented Miguel Mas Palacios, Director of Global Corporate Banking at NTT Data. “The conundrum is whether banks build their own tech, or buy it in. We’re seeing the speed of corporate banking is accelerating, and the pace of technology change is increasing too. Banks are investing in new technologies such as AI and automation, all driven by customer demand.”

 

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Book of the Month*

The Serendipity Mindset: The Art and Science of Creating Good Luck

By Dr Christian Busch
Serendipity is an aptitude for making desirable discoveries by accident. To other people it looks like “good luck”, but it is more the ability to recognise and seize an opportunity, rather than have good fortune thrust upon one. Finding a wallet stuffed with money on the conference room floor is good luck, whereas holding it up and asking if anyone has lost their wallet might be the beginning of a valuable friendship – that would be serendipity.

Chance encounters, or strokes of fortune, feature in countless stories of business success. This book looks beneath the surface, reveals and teaches the mindset that can transform pure chance into opportunity. The author is director of the Global Economy Program at New York University’s Center for Global Affairs, and a lecturer at the London School of Economics.

Serendipity is an aptitude for making desirable discoveries by accident. To other people it looks like “good luck”, but it is more the ability to recognise and seize an opportunity, rather than have good fortune thrust upon one. Finding a wallet stuffed with money on the conference room floor is good luck, whereas holding it up and asking if anyone has lost their wallet might be the beginning of a valuable friendship – that would be serendipity.

The author says “This is a book about the interactions of coincidence, human ambition and imagination”. In the above example: finding the wallet is the coincidence; ambition is the desire to make something of the discovery; add imagination and you open up a whole menu of possibilities: from spending spree to earning a reputation for honesty – or even making a wealthy friend.

Business is typically forged on human ambition and imagination, but early success often feeds an appetite for control – and “control freaks” can be blind to the opportunities thrown up by the unexpected. They only see chance events as distractions. If plans go awry, they may blame the failure on “bad luck” rather than admit their own inflexible attitude.

The author himself admits to being “a German who is used to planning” and prone to feel anxious when something unexpected happens. That makes him an ideal teacher, because he has worked hard to discover and analyse the mindset that enables one to “connect the dots” and cultivate serendipity. He presents a goldmine of examples from science, business and life where an apparent mishap or failure lead to a breakthrough.

Indeed, studies suggest that around 50% of major scientific breakthroughs emerge as the result of accidents or coincidences. A well-known example is Alexander Fleming’s discovery of penicillin, launching the whole field of antibiotics. Other examples include X-rays, nylon, microwave ovens, rubber, Velcro, Viagra and Post-it Notes – where would we be without these!

The book goes beyond the ability to recognise and respond to opportunities in chaos, but the subtitle – The Art and Science of Creating Good Luck – is actually a bit misleading. True, he does show ways to develop better fortune, but it would be better to call it “inviting” or “encouraging” good luck. For example, he suggests better ways to start a conversation with a stranger – ways that will make it more likely to lead to chance connections or shared interests.

The publishers may have chosen the word “creating” to make the book appeal to the human desire to control – for control freaks are exactly the readership that would benefit the most from this book’s wisdom and practical advice.

For the rest of us, it offers a great way to rediscover the sense of play that is so important in life – and too often lost in business.

 

“Following the success of The Serendipity Mindset hardback, a paperback edition has also now been launched under the title “Connect the Dots”.

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