PwC: Tech transformation framework for banking

Capital markets are at a critical juncture, according to consultants PwC who have set out a technology transformational framework for the banking sector to follow.

The three-step framework for change is outlined in PwC’s report, Accelerating technology transformation at pace across Europe’s Capital Markets, and offers expert insights and a fresh approach for banks as they move forward.

“Current approaches to transformation are challenged by siloed approaches, cultural legacy and technology debt,” comments PwC. 

The challenging operating environment is increasing pressures on cost from COVID-19 to ongoing regulatory burdens, shifting industry priorities including ESG. “Banks need to make tough strategic decisions and senior leadership are being tested like never before,” says the report.

“While banks have begun to take advantage of key technologies, with cloud computing and data and analytics seeing accelerated adoption, the siloed nature of transformation is challenging banks’ ability to realise benefits at scale,” comment PwC.

“We are pleased to share a framework that Investment Banks can use successfully to execute transformation and respond to the challenges they are facing.

PwC’s framework is founded on three key dimensions:

1. What do we do?

Define a long-term vision and strategy enabled by technology.

Identify the enterprise vision and purpose, the ecosystems a bank wants to play in, and the technology strategy and culture needed to deliver it

Look at how growth will be delivered and how a bank will differentiate themselves from competitive threats

1. How do we do it?

Refresh core operating model and architecture components.

Think across the end-to-end value chain to define the optimal organisation structure, operating model and architecture.

1. How well do we do it?

Embed the right people, processes and change execution capabilities.

Efficient allocation of resources to the most important tasks that enable the strategy.

Efficient approach to execution that leverages the capabilities of the industry ecosystem and enhances operational resilience.

Effective co-ordination of change that cuts across silos with a consistent approach.

The culture, mindset and skills needed to deliver the strategy and embrace change. 

“It is not enough to focus on each of these elements in isolation. To succeed, banks need the leadership in place to align across ALL these dimensions as well as the ability to deliver within each of them,” comment PwC.

Outlined in the report is some key questions that different capital market leaders should be considering, these include:

• CEO’s
  Do our strategic goals include a clear statement of our technology ambitions and is our business strategy fully technology-enabled?
  Are we organised to execute effectively against this strategy across our organisation?
• CFO’s
  How can we transform our cost base and exploit technology to reduce our cost-to-serve, while protecting our differentiating capabilities?
  How can we leverage regulatory change and investments to unlock strategic benefits and incentivise longer-term transformation?
  How can we monetise our technology assets?
• Head of Transformation
  How can we align across functions and business lines to execute change in the most effective and efficient way?

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