In a recent article for IBS Intelligence, Matthaeus Sielecki, Head of Working Capital Advisory at Deutsche Bank, wrote about the difficulties for banks and disruptors when trying to successfully innovate in the modern digital world.
Sielecki explains the key reasons why innovation is proving difficult – not least regulations, as they limit monetary and internal resources. For example, new capital adequacy requirements and increasing costs of doing business all add to the squeeze on innovation. Other inhibitory factors are discussed that make innovation difficult, such as cultural, banks’ institutional mind-sets and infrastructure.
The article goes on to describe how industry disruptors cannot survive alone. Regulation is also a massive burden on new entrants that don’t have the right expertise to navigate the structures of financial services. This is where banks’ knowledge becomes an asset, as they work alongside new entrants.
Technological change has blossomed in retail banking thanks in large part to consumer online shopping and the increase of smart devices, but the next waves of digital revolution will come in B2B transactions. To read the full article, please click here.