Banks are facing a digital revolution that may become rule of law if European Commission proposals on account access are passed. With new entrants on the inside track when it comes to technological advantages and banks at risk of becoming the 'dumb pipes', some lenders are rising to the challenge, while others simply do not get it.
Largely thanks to its innovative new solution for on- and off-exchange reporting, pan-European exchange BATS Chi-X Europe has seen its market share balloon in recent months. But, aware of the dangers of complacency, chief operating officer David Howson says that the firm is just as focused on further innovation as on growth.
Computers have reached such a level of sophistication that they can now outperform their human counterparts at some tasks, a fact that has not gone unnoticed in the banking community. But, while smart machines are increasingly being utilised in customer service and data analysis capacities, advocates of these new technologies maintain that they are designed to complement rather than replace the traditional workforce.
Once regarded as national treasures, over the past few years many exchanges have been evolving into cross-border operations, focused on capturing larger market shares. Following this wave of consolidation and collaboration, however, it still remains to be seen whether bigger really means better.
The threat of cyber attacks grows ever greater, as hackers become more and more sophisticated and an increasing level of data is handled electronically. So what are financial institutions, exchanges and governments doing to combat this threat?
Addressing the economic needs of the billions of individuals at the base of the global pyramid has long been seen as one of the great opportunities left for financial institutions. However, this section of society is now beginning to come up with its own solutions – thanks to a spate of 'reverse innovation' – leaving the large developing world lenders superfluous to its needs.
With technology making data processing 1000 times faster, banks could find the cost burden of anti-money laundering rules a whole lot lighter. Alternative data storage platforms are starting to make current systems look cumbersome and slow, not to mention uneconomical.