And the challenge will only continue with pressure on compensation, ongoing cost cutting focus, etc.
Those three barriers are regulations, legacy and culture. The three barriers are intertwined in a vicious circle. Regulations stop banks from innovating; legacy systems stop banks from innovating; a risk averse culture stops banks from innovating. All three things work together to wrap the bank in ropes of stagnation. Management are unwilling to change systems because it is too risky. Management are unwilling to place systems in the cloud because it is too risky. Management are so focused upon regulation, that innovation takes a back seat. .... And there’s the real rub. A differentiated bank is one that has a vision, strong leadership and the guts to make something happen. That’s what I’ve seen in CBA, mBank and a few others – ICICI Bank, Akbank and, to a lesser extent, Wells Fargo and Barclays – but it’s rare.