chapter  5
22 Pages

Banking and the Digital Transformation

The digital revolution has the potential of transforming every aspect of daily life, and it will most likely lead to a large-scale shakeout in the banking sector. The bank of the future may well be an information-processing company. Telecommunication and information technologies are already changing the ways in which banks relate to their customers and to regulators. Banks are also experimenting with new ways of organizing work internally and networking with other financial and nonfinancial institutions. Big data, for its part, could become the dominant way of analyzing customer profiles and assessing risks, thus relegating relationship-based banking to the background. After all, banks are in possession of vast amounts of information on their customers. As Juan Pedro Moreno of Accenture argued in a recent op-ed piece in the Financial Times, “instead of just enabling customers to pay for something, [banks] can move further into their commercial lives by helping them reach the decisions on what to buy, when, and where.”1