Technology is driving competitive advantage in financial services

Innovation and technology, Risk management and oversight, Financial Strategy
/ Banking, Insurance and Asset Management

Financial Services Leadership Summit, January 2021

The COVID-19 pandemic accelerated technology transformations in large financial institutions, as employees moved to remote work and as customers shifted to digital channels. Customers have come to expect uninterrupted, personalized digital products and services, adding to pressure as large financial institutions rework processes, accelerate investments, and explore new applications. A director said, “Legacy institutions, banks and insurers, are now moving much faster to improve customer experience because COVID-19 has accelerated the need to do that. They have to do this because traditional service solutions simply no longer work and will never work the same way again."

Technology transformation has been ongoing for some time, and the barriers and challenges are well known: the scale and cost of major upgrades, the complexity created by legacy technology, institutional inertia, and regulatory and compliance requirements. Though many of these underlying challenges persist, attitudes are shifting; leaders recognize the need to move more quickly and to try new things. At the same time, technology has advanced in ways that make more fundamental transformations faster and less costly, while also expanding opportunities for experimentation. A director said, “I think we need to spend wisely—you can waste a lot of money just as easily as investing correctly—but we simply have to stay in the race.” Financial institution leaders have an opportunity to learn and react.

At the Financial Services Leadership Summit held on November 10–12, financial institution directors and executives, regulators, investors, and EY experts discussed how financial institutions have adapted to the pandemic and the options for firms as they accelerate broader systems upgrades to support new approaches. They also discussed the implications that the path forward has for talent and culture needs. This ViewPoints synthesizes key themes that emerged in conversations in advance of and during the summit. At the summit, participants were joined by several guests: Cathy Bessant, chief operations and technology officer, Bank of America; Jim Cunha, senior vice president, Secure Payments and FinTech, Federal Reserve Bank of Boston; Scott Liles, President, Spire Insurance; Hans Morris, founder and managing partner, Nyca Partners; Kiet Pham, principal, Americas banking and capital markets technology leader, EY; and Andy Rear, CEO, Digital Partners, Munich Re.

The ViewPoints explores the landscape from the following perspectives:

  • Technology transformation is a strategic imperative

  • Ways of addressing critical technology needs are evolving

  • The changing nature of work has implications for talent and culture

  • Evolving risks and opportunities require effective governance