Large technology firms and digitally-focused startups moving in financial services is an opportunity for the traditional banking sector rather than a threat, according to Lloyds’ director of strategy and transformation.
In recent years the finance landscape has seen the emergence of a variety of new players hoping to eat into areas typically dominated by the large banks, such as payments and transfers. This includes large tech companies such as Google and Apple, a wide variety of fintech startups, as well as challenger banks offering 'digital-only' account services like Atom and Starling.
Speaking to ComputerworldUK at Forrester Research's ‘Forum For Marketing Leaders’ in London today, Lloyds' Martin Zalewski said that the bank can fend off competition by partnering with other organisations, and learning from the mistakes of those moving first with new sevrices.
“I see [the emergence of new competitors] as an opportunity because there is a lot we can learn from each other. There is a lot we can learn from the challenges and the victories all of us share,” he said.
“Any way you look at it, if you are first to market to deliver something, the chances of failure are there. And it may be that it is the second player that will deliver it better.
“You have to contextualise it. You have to understand what you are trying to deliver for whom, and learn from each other. I really don’t see it as a threat, I see it as a great opportunity to innovate together and learn from one another.”
Like most of the ‘big four’ UK banks, Lloyds is in the midst of a significant reorganisation of its business to modernise operations, with investment shifting to digital channels such as smartphone and online banking.
Creating a more agile organisation to compete with digital startups and other nimble competitors is a challenge for large banks rooted in complex legacy systems and tasked with meeting regulatory demands. Zalewski said that Lloyds – which has previously revealed it is adopting DevOps practices - is attempting to address this challenge look both within the company and externally for ways to improve efficiency of its IT operations to support the wider business.
“This is something I ponder on every day, and it takes guts to get real change. But fortunately at Lloyds we have great innovators and instigators of change, and we are moving from traditional ways of long term testing and deployment to quick [delivery methods]," he said.
“For example we have learnt from PayPal that you test in a short in a short cycle in parallel to deploying – you are not just testing end to end – you are doing it in chunks. And then you move on to the next bit and the next bit: test and deploy, test and deploy. So there is definitely a lot of great change happening in the organisation.”