Strict banking guidelines in Switzerland were recently eased to give blockchain startups more straightforward access to traditional financial services. The country’s blockchain industry is surging, with “Crypto Valley” in Zurich and Zug proving a fertile breeding ground for cryptocurrency startups. Crowdfunders in Switzerland and elsewhere are investing heavily, seeing clear ROI in kick-starting a new generation of companies such as Etherium, a blockchain application platform, and Investglass, which streamlines financial advisory services, which seek to marry smart technologies such as blockchain and AI with the conventional desire to manage and multiply money. Meanwhile, fintech lenders such as Swisspeers provide startups across all industries with crowd-funded credit, diverting custom from banks.
How can traditional banks react? Many already have AI on board at operational level for areas such as fraud detection, due diligence and cybersecurity. The next step – which is where startups are currently ahead – is to make AI the linchpin of future strategies, and identify ways to unlock the potential of blockchain for their own processes.
Staff renewal for survival
There are tough decisions for banks to make on core services, on geographical footprint – and on personnel. It is vital for banks to understand and use databases and research intelligence in order to drive innovation. It will take a change of culture, also in IT, to stay relevant. But one stumbling block is the lack of data scientists to make it happen. One way forward could be to recruit top developers who have the potential to bring on board new talent from a generation of digital natives. This staff renewal will play a key role in giving banks a confident mastery of digital technology, with people who will take a fresh, unbiased look at financial products and services without being bound by traditional business models.
Banks that embrace new customer-centric business models by breaking down silos between departments, and enabling experimentation and change are the ones most likely to succeed.
Cognizant is already helping banks to make the transition and build new strategies around technologies such as AI. To find out more, download the whitepaper How Digital 2.0 is Driving Banking’s Next Wave of Change, or visit Banking & Fintech solutions on the Cognizant website.