Description
During the Great Financial Crisis, legacy banks turned their focus to cost and capital optimization to help drive profitability amid a backdrop of slowing revenue growth. New regulations and changing business practices meant that technology investment was diverted towards regulatory and compliance challenges. While this was happening, smaller ‘challenger banks’ began to emerge, driven by Fintech startups. These challenger banks were designed around the digital revolution and were able to leverage data insights via agile technology stacks. With these insights, they offered a customer personalization in their financial services and a fully digital banking experience.
As noted in the report that follows, legacy banks often have data that is stuck in multiple silos supported by core banking technology that was built in the age of black and white television. Manual intervention is high, which slows down operating speed, reduces flexibility, increases costs, and ultimately degrades efficiency and experience. Because a lot of digital technology isn’t part of core banking technology, challenger banks tend to be quicker at incorporating new products and processes onto their platforms and help to easily connect with third-party products, offering more choices to the end user.
