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Banking Technology: ICT to the Rescue

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Harry-McDermott

By Harry McDermott, CEO, Hudson & Yorke

Harry-McDermottIn today’s economic environment, as the UK government seeks to promote competition, high street banks are being forced to compete for custom. Low interest rates are one end of the spectrum but nothing less than exceptional customer service is necessary when dealing with Joe Public’s cash. But amongst the apparent challenges are opportunities for banks to approach a new pool of customers with an enhanced service.

Typical high street banking ICT systems are particularly complex and many banks have spent the past 10 to 15 years patching legacy ICT systems, implementing shared infrastructure across group subsidiaries, and adding new technology and infrastructure on top of existing solutions. However, when used properly, technology can be a strategic asset which can help improve service to customers as well as cut costs.

Over the last decade, we’ve seen a shift in communications, encompassing more than just computers but information and knowledge. We have stumbled into an all–encompassing generation and banks need to keep up in order to take advantage of new revenue streams. Customers are constantly evolving in their banking needs and expect to be able to conduct their banking to fit in with their lifestyle; whether that be 24/7 banking; mobile banking on the go; or the traditional in-branch banking. All three have different ICT requirements in order to satisfy the range of customer needs.

As a result, banks should adjust their approach to deal with changing consumer behaviour. According to a survey from Accenture1 looking at the way that 4000 customers interact with their bank, , daily and weekly branch visits fell from 19% of all interactions with the bank in 2010 to 15% in 2012 while interactions via mobile banking showed positive growth increasing from 10% in 2010 to 22% in 2012, almost doubling in popularity.

Self-reported customer satisfaction and willingness to recommend banks remained level, but loyalty fell, with the percentage of overall banking customers that had switched to another bank increasing from 11% in 2010 to 15% in 2012. In September, the UK government introduces seven-day account switching, which will allow consumers to be able to switch to a new bank more easily. Technology that can support customer experience and personalised services could be a clear path to customer retention.

A bank that can upgrade to a more connected system providing overall visibility of a customer’s interactions will take the lead in customer service and win customers from the competition when the new account switching rules come into force. Those banks that have a single view of the customer have opportunities to cross-sell and up-sell products and services that the customer may be more amenable to buying – a coup during a time when banks are under increasing pressure to maximise revenues.

Many of our banking clients come to us to aid them with updating their legacy ICT infrastructure. It is not banks’ lack of desire to innovate that is holding them back from spending on new systems but the sheer scale of maintaining a complex network of infrastructure in tandem with the growing burden of regulatory compliance. They recognise the need to future-proof their systems and provide an integrated, multi-channel approach that will aid customer service and retention.

The key to solving these challenges lies with a change in mindset. Banks have become caught in a cycle of ICT budget cuts as well as budgets being taken over with fire-fighting existing issues. The only way to escape is to develop a longer term strategy which fosters a culture of innovation.

Change will not be achieved overnight, and an effective change management strategy should reach many years into the future. Banks need to recruit senior ICT professionals with the right mindset, skills and stomach for the fight who can drive innovation. ICT is well placed to take the lead but it requires the right people to lead the charge and without these key figures on board the ICT department is often reduced to playing a facilitating role.

With the UK government currently focused on cost cutting measures and improving banking services it’s certainly not an ideal time for banks to be battling with archaic legacy ICT systems. Banks will find that reinventing communication systems will go a long way to servicing the ever-evolving expectant customer and managing customer insights and performance.

Additionally, if UK banks are to maintain the large majority of the UK market in the face of an open European banking system, a more sophisticated level of ICT technology will be fundamental. It is through this technology that they will gain a competitive advantage, offering incomparable customer service.

………

About Harry McDermott
Harry, chief executive and co-founder of Hudson & Yorke, has 25 years experience in the technology sector, 20 of which have been as a consultant and trusted advisor to senior IT decision-makers in large multinationals. Prior to launching Hudson & Yorke, Harry was a Director at Deloitte Consulting and a Director of Mason Group (now Analysys-Mason). He is a graduate of Trinity College Dublin holding a postgraduate MBA and undergraduate degrees in Electronic Engineering and Mathematics. Harry has successfully negotiated and/or advised on some of Europe’s biggest telecoms/network contracts and has supported clients in the design/implementation of their transition and transformation programmes. He has also been engaged as an independent consultant/arbitrator in benchmarking, valuation and dispute resolution.

 

 

 

 

 

 

 

 

 

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Bitcoin, ether hit fresh highs

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Bitcoin, ether hit fresh highs 1

SINGAPORE (Reuters) – Bitcoin hit a fresh high in Asian trading on Saturday, extending a two-month rally that saw its market capitalisation cross $1 trillion a day earlier.

The world’s most popular cryptocurrency rose to an record $56,620, taking its weekly gain to 18%. It has surged more than 92% this year.

Bitcoin’s gains have been fuelled by evidence it is gaining acceptance among mainstream investors and companies, such as Tesla Inc, Mastercard Inc and BNY Mellon.

Ether, the second-largest cryptocurrency by market capitalization and daily volume, hit a record $2,040.62, for a weekly gain of about 12%.

Ether is the digital currency or token that facilitates transactions on the ethereum blockchain. In the crypto world, the terms ether and ethereum have become interchangeable.

Ether futures contracts launched on derivatives exchange CME earlier this month.

(Reporting by Vidya Ranganathan; Editing by William Mallard)

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World Bank pushing for standard vaccine contracts, more disclosure from makers

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World Bank pushing for standard vaccine contracts, more disclosure from makers 2

By Andrea Shalal

WASHINGTON (Reuters) – The World Bank is working to standardize COVID-19 vaccine contracts that countries are signing with drug makers, and is pushing manufacturers to be more open about where doses are headed, as it races to get more vaccines to poor countries, the bank’s president said on Friday.

World Bank President David Malpass told Reuters he expected the bank’s board to have approved $1.6 billion in vaccine funding for 12 countries, including the Philippines, Bangladesh, Tunisia and Ethiopia, by the end of March, with 30 more to follow shortly thereafter.

The bank is working with local governments to identify and fill gaps in distribution capacity, after they purchase vaccines under a $12 billion World Bank program, and also to standardize the contracts they are signing with manufacturers, he said.

The bank’s International Finance Corp, its private financing arm, has $4 billion to invest in expanding existing production plants or building new ones, including in developed countries, but needs more data on where current production is headed, he said.

“We are eager to be investing in new capacity, but it’s hard to do because you don’t know how much of the existing capacity is already committed to the various off-takers,” Malpass said in an interview with Reuters. New or expanded plants could be used to produce other types of vaccinations in the future, he said.

The bank’s funds could be used to expand plants in advanced economies, if the production was earmarked for developing nations, he said.

Malpass welcomed Friday’s pledge by the Group of Seven rich countries to intensify cooperation on the pandemic, saying it could help jump-start deliveries of vaccines to poorer countries, which are lagging far behind rich countries in getting shots in arms.

Data compiled by Our World In Data, a scientific online publication, showed Israel was leading the world in COVID-19 vaccinations, with nearly 82 of 100 people vaccinated, while India and Bangladesh reported less than one person per 100, Many African countries have not started at all.

Malpass said he was heartened by news about new vaccines coming down the road, and about Pfizer Inc and BioNTech SE seeking permission to store their vaccine at higher temperatures, which would ease another obstacle to deliveries in lower-income countries.

(Reporting by Andrea Shalal; Editing by Heather Timmons and Leslie Adler)

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Google to evaluate executive performance on diversity, inclusion

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Google to evaluate executive performance on diversity, inclusion 3

By Paresh Dave

(Reuters) – Alphabet Inc’s Google will evaluate the performance of its vice presidents and above on team diversity and inclusion starting this year, the company said on Friday in one of several responses to concerns about its treatment of a Black scientist.

Timnit Gebru, co-leader of Google’s ethical artificial intelligence research team, said in December that Google abruptly fired her after she criticized its diversity efforts and threatened to resign.

Alphabet and Google Chief Executive Sundar Pichai ordered a review of the situation. While Google declined to share specific findings, the company announced on Friday it will engage human resources specialists during sensitive employee departures.

Pichai in June said that by 2025, Google aims to have 30% more of its leaders come from underrepresented groups, with a focus on Black, Latinx and Native American leaders in the United States and female technical leaders globally. About 96% of Google’s U.S. leaders at the time were white or Asian, and 73% globally were men.

As a result of the investigation, the company also expanded a commitment announced in June to devote more resources to retaining and promoting existing employees, including by expanding a team addressing disputes among workers and their managers.

The diversity component of executive performance reviews was not previously announced, and the company did not immediately share details about what would be measured and how pay would be affected.

Alphabet for years had rejected proposals from shareholders and employees to set diversity goals and tie executive pay to them.

Irene Knapp, a former Google employee who advocated for one such proposal at a 2018 shareholder meeting, said on Friday, “I am pleased that they met our demand from 2018, which was a bare minimum that should have been easy to do immediately.”

Evaluating managers on diversity goals is becoming more commonplace. McDonald’s Corp on Thursday tied executive bonuses to diversity.

(Reporting by Paresh Dave; Editing by Cynthia Osterman)

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