Regulation has slipped down the priority list for some of the world’s biggest banks, to be replaced with the pressing need to digitise colossal banking systems that, in many cases, are over decades old. In a survey which canvassed 208 banking executives, it was discovered that 46% of respondents cited implementing a digital strategy as their top priority for the year to come, beating regulatory change, which garnered 35% of the vote.
Though the world’s leading banks often conjure images of lightning-fast transactions conducted through sophisticated systems, the reality couldn’t be further from the truth. Many banks run on technology that has not been updated for years – and the new priority for the financial sector is how to address the massive overhaul that’s necessary to futureproof the industry.
A new innovation
Luckily, a brand new innovation in running shared databases named blockchain is being suggested as the key tool that will bring financial services up to date and futureproof them for the years to come.
Blockchain is an interesting resource – it was originally created as a weapon to be wielded against banks. The technology underpins the concept of bitcoin, a decentralised currency which is based on cryptography and was initially meant as a tool to remove power from the hands of banking institutions.
Ironically, the banks have begun to adopt the blockchain concept, with many of the industry’s biggest names throwing their weight behind R3 – a company developing a unique blockchain network exclusively for use by businesses within financial services. Goldman Sachs, HSBC, UBS, Bank of America, JPMorgan and Morgan Stanley have all united to support the company as it seeks to upgrade the manual back-office machinery to a system that would be compatible with a blockchain setup.
The importance of digitising
The future is undoubtedly digital – and organisations need to adjust now before upgrading begins to appear as an impossible task. Banks already have masses of data that needs to be digitised, with new backroom setups brought in to ensure digitisation is consistent and sustainable. Organisations that shun digitisation and choose not to adopt it at this stage are putting themselves at a serious disadvantage in the competitive market, and also depriving their customers of the true, lightning-fast service that banks in 2015 should be capable of.
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