The purpose of the financial services sector is to secure and enhance the economic well-being of people – of households, communities, businesses and corporations – helping them to meet their ambitions now and in the future while reducing their exposure to particular risks.


Customers and regulators expect financial services organizations to achieve this by leveraging personal data to the customer’s advantage. Customers’ expectations for personalization are incredibly high due to their experience with service providers outside the sector. There is also an expectation for banks to provide evidence that their customer’s best interest is paramount.


More than 40 years ago, banking required customers to visit a physical branch for any requirement. The customer’s activities were limited to transacting products and services at the local branch, with the branch manager acting as the customer relationship manager, and all account and product details managed centrally. All of these data structures still exist, and all of those instructions are still in the rules of systems that were architected 40 years ago.


This model contrasts with today’s marketplace, which is getting real-time advice in a profoundly intimate, secure and convenient manner that operates at scale. FinTechs, new entrants, startups, and disruptors are entering the financial-services market using new approaches and technologies. These firms seek to build economic models similar to those of banks, often targeting a niche or particular product.


These new financial-services providers – companies such as Tencent, Alibaba, Apple, Amazon and Google – have platformed completely new online relationships. Their computing model has rejected client-server models and rigid database models, implementing new information structures focused on customer relationship.


Processes are now automated. The data structure is open, not closed. Monolithic account and product platforms are no longer a constraint. A customer’s changing requirements are supported throughout the economic life of the relationship, even accounting for the customer’s relationships with other people, businesses, or other entities.


As the financial-services sector embraces the cloud, regulators worldwide have issued guidance supporting outsourcing to cloud services, a change from their 2015 position. However, regulators are applying greater scrutiny on financial-services organizations to meet customers’ needs with an increased level of integrity and security.


Through cloud and virtual development, there is a pathway to move away from a monolithic legacy architecture and data process systems. However, the majority of banks, whether in Europe or America or Asia, still run on old data models, hardcoded processes and mainframe application designs.


The world’s banks all offer mobile services, online services, call center services or direct bank services at the branch. Technology assets are no longer the determinate of competitive advantage for these banks.


So, what does a legacy business do to compete with either the focused disruptor or delivery of competitive advantage?



To remain competitive, the financial-services industry must enhance its digital advice offerings. It must develop new ways to provide information to customers cost effectively, from the most uncomplicated online guidance down to more complex and holistic financial planning.


Real-time relationships in a digital world can help financial services positively meet customer ambitions. To develop such relationships, banking leaders should take a new approach to investment and spending. The competitive positioning of new skills and delivery should include the following:

  1. Bring people, process and applications/technologies together to improve delivery using an agile approach
  2. Simplify the business processes by defining actionable strategies for process re-imagination and design
  3. Leverage lean techniques and remove inadequate processes and redundant applications, that do not satisfy a valuable business process
  4. Leverage the depth of data that banks have collected. Use data-driven analytics to understand and engage with customer segments in a new light
  5. Products must have an unambiguous market and offer services that give customers something they can’t already get from market competitors. Integrate rapid data-driven experimentation as a core competency, and “crank up” the delivery cycle
  6. Enhance integration of business units through sharing data, focusing on the customer and move to a continuous delivery model. Absorb agile, prescriptive analytics, and rapid prototyping to deliver engaging customer value
  7. Partner with the right technology provider that is going to change, and support, your business model, and allow bank staff to work directly with the customer


Customers’ expectations for personalization are incredibly high due to their experience with service providers outside the sector. Legacy systems no longer provide a competitive advantage. Competition is increasing, and customers are engaging in modern financial ecosystems. The traditional financial-services company must enhance its digital advice offerings to survive.

Alan Jackson

Alan Jackson

Partner, Enterprise Architecture, Enterprise Strategy & Advisory


Alan has more than 30 years of rich architectural experience in all aspects of large-scale information technology. His expertise spans many high-profile companies in the Asia-Pacific region.

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