Looking back at the past 11 months, this truly is a year of disruptions. And it’s no different for banks. Internet companies, telcos and payment gateways are all in for the transaction banking pie. And this is compounded by e- and m-commerce. In China, Alibaba, Tencent and Xiaomi have secured banking licenses. It’s an interesting observation and I wonder when this will happen in SEA. And it’s interesting how that pressure on the banking business translates to demands on IT personnel and technology. Like it or not, IT can no longer be on the back foot.

Here’s Mike’s Take on the challenges levied upon IT in some banks in SEA, as a result of the on-going digital disruption.

  1. A bank is aggressively growing their core lines of services (loans and deposits) to close the gap with market leaders. IT is expected to improve speed of services deployment (infrastructure and apps) so that the right capacity is in place at the right time. At the same time, IT is pressured to deliver services at the right cost. This will involve expansion and proper capacity planning in place for IT infrastructure. Imperative to ensure services are up and running without disruptions – availability and latency. Also quick turnaround for IT service deployment.
  2. A bank is embarking on new business groups that have a specific focus on global transaction banking. GTB is a growth area for banks, particularly since Asia leads in this market at 41%. The top 3 concerns are regulations, fast time to market (agility) and cost. IT in this sense, will be in a critical position to address the concerns and facilitate the new business.
  3. A bank is stretched between keeping costs down for the existing systems (issues, upgrades, growth), and investing in new digital services and initiatives. This is an age-old “cut cost” issue. One of the common mistakes that IT make is to focus ONLY on the existing enterprise systems. It is key to keep the existing systems running. But keeping things running and seen as maintaining the systems often paint IT as a non-innovator in any company. This erodes IT credibility. IT must take the lead in technology enablers in this digital age. This requires a reboot of IT thinking.
  4. A bank sees a need for restructuring and re-skilling the IT planning and operations staff, with focus on cross-domain skills. The bank realizes the need for outcome-based roles in IT. Roles that are able to advise and act across multiple domains towards an outcome, as opposed to technology siloes that has served well in the past. Roles like cloud architects, DC architects, EAs are now key roles that must be developed to keep IT ahead.
  5. A bank has a manual, lengthy process to provision IT services (infrastructure and applications), in spite of running a large virtualized environment. IT is failing to meet the SLA imposed by the bank. This has resulted go-to-market delays to the lines of business. IT has to close this gap with cloud-enabled technologies, be it private or public.
  6. A bank is proactively exploring gradual steps towards incorporating predictive analytics practice and technology in the bank. IT acknowledges that big data analytics is over-hyped. They are frustrated with the various approaches that make achieving outcomes sound easy but the truth is far from that. IT has hence poured effort into focusing on the business outcomes that the businesses desire. IT therefore is taking an approach that makes gradual parallel steps in technology, data science processes, skills and practice.

For the strategy to address these, wait for the next post 🙂