Overview
New technology can only be as good as its implementation. Digital platforms can position banks so that they are able to immediately respond to consumer needs. However, financial institutions must approach this ‘digital reprogramming’ in a manner that is consciously designed to proactively exploit technology to its full potential.
Developing and designing scalable digital platforms for innovation is no mean feat, and a successful shift to highly flexible infrastructure demands a team that understands the power of available technology.
What is Self-disruption in the Banking?
According to Catherine Zhou, HSBC’s global head of ventures, digital innovation and partnerships, self-disruption is about reinventing part of your existing business. Sometimes this is done incrementally by improving existing processes, sometimes this is through radically challenging the status quo and doing things completely differently.
HSBC started with the concept that the bank could make peer-to-peer payments better for customers in Hong Kong, challenging existing banking payment models. Zhou explains: “In house, while maintaining our existing digital payments channels, we built a new social payments app called PayMe which is faster and more engaging. It now has the largest market share, with more than 2.5 million users, and we have expanded it to merchants through PayMe for Business.”
The Dearth In Creative Talent
As is natural in highly regulated industries like banking, there are limits as to how far concepts such as self-disruption can be pushed.
Bright believes that there is a balance that must be struck, and while not all areas warrant disruption, this balance can be found through a system of controls and regulation with innovation – “This is real state of the art innovation in action.”
“When it comes to highly-regulated environments, it is better to ask permission beforehand than beg forgiveness afterwards. We therefore work closely and collaboratively with official institutions, including central banks and regulators, when exploring potentially disruptive innovations,” states Bright.
Conclusion
Zhou concurs, noting that cloud offers financial services institutions the ability to architect for resilience in a way that is not possible for on-premises technology. For example, the ability to use cutting-edge data science and machine learning, delivering improved functionality, and increased automation.
What’s more, Newcomer argues, is that it is possible to achieve a stronger security posture in the cloud than on-premises. One reason for this is that when migrating to the cloud banks ensure that every control mechanism is meticulously put in place.
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