As we near the end of summer, many bank executives are taking some well-deserved vacation. But I’d wager that most of them will have a harder time relaxing than usual.

That’s because disruption in banking remains high and could intensify. Consider what’s happened in just this calendar year.

The effects of the first rising rate environment in the past 17 years have come to bear with a vengeance. While rising rates have historically been a boon for most banks, in the age of smartphone-fueled bank runs they have also caused chaos. We’ve seen bank failures, credit rating downgrades and plunging commercial real estate valuations, not to mention growing government pressure to drive ESG investment and possible new capital requirements for banks. Meanwhile, despite easing recently, 83% of banking executives surveyed in Accenture’s recent Pulse of Change survey remain concerned about inflation.

To top it all off, the fundamentals of customer behavior have evolved. With 90%+ of banking touchpoints now digital, those remaining in-person conversations take on outsize importance.

It’s a daunting time and many banks are hitting the breaks on “big bang” transformation projects as a result. Some are in what you might call turtle mode, pulling their heads into their shells to wait things out. Recent cross-industry research, in fact, found that most banks are unusually cautious right now.

The analysis of 1,516 global businesses found that less than 10% of banks today are committed to reinventing their business and operating models.

This caution is understandable – maybe even commendable, given banking’s regulatory environment and the sector’s crucial economic role.

But the findings also suggest that clinging to the status quo might mean getting left behind.

The few banks that are reinventing their business and operating models are, on average, more profitable (+1.2 percentage points in pre-tax return on equity) and more efficient (30 basis points in operating expenses over assets) than the industry average. They also manage their costs better, and their change programs deliver 30% more financial value in their first six months and progress significantly faster.

The good news for the banks not doing this today is that it doesn’t require a full rethink of the basics of banking. More than anything, what sets the leaders apart is their ambition and commitment to continuous change. Rather than looking at transformation as a series of one-off projects, they’ve embraced a culture of continuous reinvention to meet the needs of today’s customers.

This attitude is not restricted to banking, as Accenture’s Group Chief Executive of Strategy & Consulting Jack Azagury pointed out at the World Economic Forum earlier this year. “Across industries, our research shows that three-quarters of senior executives will spend more time and effort on reinvention and digital transformation even in an uncertain economic environment. However, only a small group of companies fit the criteria of what we call ‘Reinventors’. These are the companies that have started to set a new performance frontier with technology, data, AI and new ways of working. These leaders are making change part of the DNA of their companies, a continuous motion that cuts across organizational silos and leverages the company’s digital core as a competitive differentiator.”

So what does this mean in practice for banks? Let’s look at the evergreen issue of core banking.

It’s well known that most banks’ cores are big messy bowls of spaghetti code developed over decades. The technical debt of old cores has plagued organizations for many years, in part because core modernization is resistant to the “big bang” approach to tech transformation.

But we see banking Reinventors tackling this problem in a more gradual and effective way. They are digitally decoupling from legacy code, systematically building modern internal API architectures, and then selectively upgrading and replacing core functionality. In the process, they are untangling the spaghetti code one string at a time and building a modern core that delivers speed and innovation.

Another example comes from talent management. Despite the industry’s longstanding challenges attracting tech talent, the 19th Century-style “command and control” workplace culture still prevails at many banks today. We find leaders in the industry have broken this down and found ways to empower their up-and-coming tech leaders so that working in a bank is much closer to working in a startup than it is to Fidelity Fiduciary Bank from Mary Poppins.

Transforming a bank in these ways is no easy feat – and leading a bank in today’s operating environment is not a job for those who prefer the easier path. The good news is that those that do embrace a mindset of continuous change across their culture, technology and operations can expect to better serve customers and outgrow banks that remain stuck in turtle mode.

Bank execs, in other words, will have plenty to think about on their vacations.

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