First signs of fintech-style info technology for banks

Technology-innovation road maps are now marked by a pursuit of many different things by the banks, which builds to one over-arching question: Amid the confluence of choices, what really are the next best steps for Thai banks?

One of the first steps worth taking is an evaluation on how technology resources need to be planned for, procured and provisioned for in the new era of information technology. 

We know of many leading banks in the region that have recently undertaken a more thorough review of their IT spending, which led them to realise that even if IT budgets move up only slightly, the bank can afford to invest more. 

There are certainly positive developments that banks can take advantage of. These include the reduction of costs associated with traditional hardware such as storage, servers, networking and so forth, as well as the greater availability of cloud computing. 

These trends portend relief in some areas of high, and frankly inefficient, spending in the past.

The outcome for many IT leaders as they complete this spending reassessment is how they can put in place true IT-as-a-service for their banks. To this end, they are optimising workloads, business processes, applications and IT systems – and providing the IT resources needed to support these.

This is the “Integrate” dimension of IDC’s new “Framework for IT Leadership: Leading in 3D”.

When the IT organisation succeeds here, it becomes a mature broker, integrator and orchestrator of the delivery of IT services. Surely, this is a welcome development for IT, which has been too long considered a mere support function, so that the chief information officer and the IT organisation become an enabler of performance and innovation of the bank. 

In short, IT ensures that innovations can work, especially when they scale.

And banks indeed have innovated. Notice the release of at least one new digital-channel initiative in the Asia-Pacific region daily (some of them in Thailand), or the improvements in turnaround time for key business processes, or the launch of products that respond to customers’ needs for instantaneous, personal and advice-centric offerings.

The innovations have gathered pace to the point that banks – or at least the most active ones – can be seen to take the playbook from the fintechs.

Still, the financial-technology mindset needs to be made more real – and not be mere articulations of the bank’s vision of “doing more new things”. 

For sure, the ways that IT works have to change – for example, in being pragmatic about how IT capabilities can be sourced and provisioned, but keeping to high standards of availability and scalability, and standardising innovations into enterprise-grade platforms as quickly as possible.

These seem to form the modus operandi of fintechs that the banks can learn from.

 

Michael Araneta is country manager of IDC (Thailand).