Banks’ technology is old but their size makes adopting innovation a long and complicated process, Barclays chief data officer, Usama Fayyad said on Thursday.
Speaking at a business conference in London, Fayyad said the banking industry was at risk of becoming a “boring business”.
“Banks are 10 to 20 years behind in terms of technology,” said Barclays CDO.
“We need new skills and new technologies and we need changes to happen quickly in what is a decreasing margin environment.”
As member of a panel addressing the theme of harnessing change in financial services, Fayyad said the so-called “Fintech” revolution will not spell the end for traditional banking institutions, but could make turn them into a business that was no longer appealing.
“The question isn’t whether banks are gonna die as a result of technology innovations,” he said.
“The question is ‘Can we make the banking business interesting?'”
His concerns were echoed by SWIFT chief executive, Gottfried Leibbrandt, who stressed that while the emergence of new technologies in the financial service industry will not bring the curtain down on so-called “legacy banks”, traditional institutions ran the risk of being left behind.
“To an extent we need bank to be conservative, particularly given what happened in 2008,” he said.
“However we also want banks to change and while the financial sector revolution will help them their innovation, it’s not something they should be taking for granted.”
In the aftermath of the financial crisis and of the huge fines handed out by the regulators, a number of banks have placed greater emphasis on transparency and on a more technological approach aimed at delivering a better service to their customers.
However, the emergence of new technologies, such as instant payment system and bit currencies, highlights the gap to bridge remains sizeable.
However, while the number of challengers banks and lenders that tend to focus on a small number of customers has grown exponentially over the last few years, some still believe banks should not scale down on the number of services they offer to their users.
“Banks shouldn’t specialise, as people want organisations that sell everything,” said Christophe Chazot, group head of innovation at HSBC.
“Look at the likes of Amazon, offering everything customers want.
“At times it’s manufactured by Amazon, at times it’s only sold by them and that’s should be the way forward for the banking industry as well.”