To both cut costs and keep hiring the best client-facing bankers, the Wall Street firm plans to replace many back-office roles, such as in data collection and processing, with computer systems that can do the same job quicker, more cheaply and with fewer errors.
Compliance is an area where banks could make vast savings from new technologies, according to Richard Lumb, head of financial services at Accenture, who estimated that “thousands of roles” could be replaced by automated systems.
Speaking on the sidelines of Davos, Mr Lumb said: “Companies have really thrown bodies at this to deal with the demands of the regulators. They have had no option. But I think we are reaching a peak now where they are looking to say: ‘How do we automate?’ They will automate to get better compliance, but also to cut costs.”
Almost every type of financial activity — from banking to payments to wealth management and more — is being re-imagined by startups, some of which have garnered blockbuster investments. Meanwhile, the old guard is trying to solve a puzzle presented by the fintech revolution: How can they benefit from the rise of digital, and how can they avoid obsolescence?
Incumbents are enacting strategies to ensure they remain relevant. Many financial firms have woken up to the threat posed by fintechs and are implementing innovation strategies to stave off disruption. The majority of these strategies involve some interaction with fintech firms.
The relationship between incumbents and fintechs continues to evolve. Fintechs are no longer viewed exclusively as a threat, nor can they be ignored. They are increasingly viewed as partners, but that narrative alone is too simple — in reality, a more nuanced connection is taking hold.