As the industry adapts to new risks and opportunities, banks must keep pace with technological change while increasing efficiency and scale. The need for new technology isn’t in question, but how to deliver it remains a roadblock for many financial institutions.
Contributed by Sinéad McIntosh, Global Head of Revenue for Financial Institutions, BBH
To understand the choices shaping success, BBH partnered with EY to gather feedback from more than 80 senior banking leaders across the US, Europe, and APAC, spanning asset servicing, operations, technology, and product. Our research revealed a fundamental paradox at the heart of asset servicing strategy: the areas of greatest investment need are often the areas of greatest resistance to change, while the areas of lowest strategic priority can deliver disproportionate returns.
Five takeaways for a modernisation programme
• Modernisation should start with a clear segmentation of the technology estate: It’s important to distinguish between capabilities that protect and scale the core business, those that unlock growth in new markets, and those that reduce operational and regulatory friction. Each category requires a different investment case, risk appetite, and execution model.
• Prioritise high-impact, lower-friction wins when sequencing core change: Areas such as onboarding, account opening, KYC/AML, and reporting can deliver highly visible, measurable improvements in client experience, efficiency, and risk reduction, but should be sequenced and integrated as part of a broader core transformation.
• Design for interoperability, not isolated replacement: As asset classes, data sources, and client needs multiply, banks should avoid creating new silos in the name of modernisation. The most effective technology strategies will be modular, data-led, and built around integration. This allows banks to connect legacy platforms, specialist vendor solutions, and future capabilities without forcing clients into multiple operating models.
• Use partnerships strategically: Partnerships accelerate access to new capabilities and can open more doors than internal build programs. The goal, however, is not simply to outsource complexity. Partnerships will be more successful if they are focused on creating a more coherent client experience and are supported by clear governance and a robust long-term operating model and tech stack.
• Make the client experience the organising principle: The biggest risk is not only under-investing in technology but investing in ways that increase fragmentation. Modernisation efforts should be judged by whether they give clients simpler access, better data, faster onboarding, and greater confidence across all asset types.
• The road ahead: Winners will be those that sequence investment best: protecting the core, fixing friction points, supporting new asset classes, and partnering for speed and specialist capability. The ability to bring these pieces together into a cohesive operating model will be a clear source of advantage.
Read the full report on bbh.com
The views expressed are for informational purposes only and are current as of the date of the publication.
