In challenging circumstances, the UK banking sector is showing signs of greater agility and innovation than possibly ever before, say the results of a new survey.
Working with FT Focus, we polled senior leaders from retail, commercial and investment banks with a presence in the UK to uncover the impact of COVID-19 on core operations. The results make for interesting reading. Some 78% of respondents said that UK banks have "surprised themselves with their adaptability during the pandemic. Similarly, nearly three-quarters said that their organisation has become more innovative in response to the new challenges they face. It's clear that the financial services industry - highly regulated and not known for operational efficiency - is being forced to innovate at pace.
Survey respondents cited "making sales and winning new business" as the biggest new challenge posed by COVID-19, followed by "customer service" and "risk management and compliance processes."
However, one bank's challenge is another's opportunity. Perhaps typical of the competitive nature of the industry despite the pandemic, roughly equal proportions of respondents viewed COVID-19 and Brexit as opportunities and threats to business. In fact, the only point of consensus seemed to be about the use of emerging technologies. More than half of respondents viewed AI, blockchain, cloud and automation as opportunities for growth.
The survey results also highlight the ways in which the banking industry is rising to meet these new challenges. Just under three-quarters of respondents expected to invest more in automation to unlock efficiency, and two-thirds said they could see increased investment in technology happening in the next two years. Cost-cutting was also on respondents' minds, with two-thirds planning to make savings in response to the pandemic. The usual narrative of cuts is still there, and partly in response to that, investment in technology featured highly in senior banking leaders' priorities.
Guy Mettrick, Industry Lead, Financial Services at Appian commented, "COVID-19 has forced the banking industry to rapidly adapt to new challenges. The survey results prove that banks are able to be agile, innovate and implement new technologies when the market demands. With cost cuts on the horizon for a significant number of UK banks, finding new ways to stay efficient and deliver compliant, effective service has probably never been more of a priority."
Conducted by FT Focus in collaboration with Appian, the survey gathered responses from more than 250 senior UK banking executives in July 2020. Just under half of them held C-suite positions, including 27 CEOs. FT Focus also spoke in depth to Ritesh Jain, then COO of Digital Technology at HSBC. Download the full survey report to read his take on how banking leaders are navigating the challenges that emerged in the first half of 2020. Although this survey focused on banks with a UK presence, as a global financial hub it's thought that the results are indicative of the wider banking sector internationally.
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