This will require re-examining their talent base, their processes and technology.
Whilst having mentioned fintech above, you could read technology as the cornerstone to this inflection but do so at your peril.
The change that the banks must make is truly holistic. This isn't about tweaks. It is about overhauls. Existing talent almost certainly won't not have the ability to plug the bank into the modern ecosystem of providers. After all, the existing processes are designed for a protected world not the seamlessly connected. The existing technology won't be up to speed either.
This scale of change will pose challenges to the bank C-suites and boards. They will need to make choices on what can they do on their own and for what they need to look externally. Consider the amount of money banks are spending on IT changes for required regulatory needs alone — a recent Accenture survey of 131 global financial services firms, found that more than half expect to invest at least US$200 million to overhaul how they do business to address global structural reform regulations this year, with nearly one third expecting to spend at least US$500 million. Given that expense, it would be very difficult for them to seek another sizeable quantum of investment on an IT bet that has such a huge degree of variability.
Should you think I am trying to encourage bank executives to encash their employee stock options now and look at other industries, I am not. I firmly believe the opportunity far outweighs the challenges and whilst the execution will be key, choices are not that difficult.
Here's what banks will need to do. Talent will certainly require a refresh and so banks will need to infuse old with the new. This change is too big and more importantly too quick to manage from within. To define the characteristics of new talent will require external help too.
On the capital front, banks should junk traditional ownership structures and move to service models. The merits of the Everything as a Service (EaaS) models have been well documented and were top on peoples' minds at the recent Sibos event on payments in Singapore.
Changes are no longer about look and feel; they are substantial. So EaaS is essential to delivering that transformation. And partnering with businesses that are vested in your success is essential to the delivery too. Your partners need to be flexible — they need to be willing to invest as you grow, but shrink during ebbs — you cannot be in a constant debate with your board about funding. In short, this new world order for banks is heavily reliant on its partnerships — and one where everyone is interconnected to benefit from success.