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Last Updated : Mar 26, 2019 08:16 PM IST | Source: Moneycontrol.com

Digitisation emerging as the key to survival in banking

Banks will need to be leaner and more efficient if they are to compete effectively against digitally mature peers and fintechs

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Representative image

With the momentum that has lifted the banking sector's performance over the first half of the decade slowing in all major markets, banks must leverage digital technology to battle disruption and stem the threat of disintermediation brought on by fast-moving, newer entrants—or pay the price in staying power and profitability, according to a new report by Boston Consulting Group (BCG).

This ninth annual survey of the health and performance of the banking industry by BCG examines global and regional profitability levels and how institutions can raise them, explores ongoing regulatory trends and how banks can navigate them, and examines how core risk and treasury functions must adapt both their operating models and their roles in the wider banking organization to be more efficient and effective.

"As digitization opens the financial services ecosystem to new and niche players, we expect to see fewer full-stack banks," says Gerold Grasshoff, the global leader of BCG's risk management segment and a co-author of the report.

"As the banking value chain breaks up, banks will get the opportunity to reposition themselves. They will likely pursue a mix of strategies, such as becoming platform leaders, being specialist providers, and promoting infra­structure-as-a-service offerings. The cost basis will also change, and banks will need to be leaner and more efficient if they are to compete effectively against digitally mature peers and fintechs," he added.
First Published on Mar 26, 2019 08:16 pm
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