Why operational resilience matters in digital transformation

The financial services industry is on the brink of a major transformation. With the rapid advancement of new technologies, banks now grapple with the critical task of bridging the gap between traditional banking services and the demands of a digital-first customer base while fortifying their operational resilience.

At Standard Chartered, our goal is clear: We aspire to redefine what it means to be a client-focused, data-driven, digital bank. To achieve that, our services must be perpetually stable and reliable, not just for our clients, but for our business partners as well. Operational resilience, a bank’s ability to adapt and function amidst major disruptions, is an essential priority.

Providing our clients and businesses with on-demand services whenever and wherever they need them is of paramount importance. Operational resilience extends beyond just availability and covers topics as broad as cybersecurity, data quality, IT resilience, product resilience, and geopolitical resilience. We also scrutinise every third party we work with and ensure our teams continually elevate their service offerings and experiences across our networks in Asia, Africa, and the Middle East.

Naturally, each jurisdiction has unique nuances in its operational and regulatory requirements; however, our core operational resilience principles remain consistent. This helps us to ensure we deliver client-centric services reliably, while incorporating specific country requirements.

Setting the right strategy

Since we introduced our bank-wide Fit-for-Growth programme in February 2024, we have embarked on a journey to transform our ways of working. We are shifting from being “risk-focused, client-aware” to becoming “client-focused, risk-aware.” This shift is all about streamlining, standardising, and digitising our business to boost our efficiency and productivity. Our ultimate goal is to accelerate our transformation agenda and deliver even better results for our clients and our teams.

As part of our digital transformation, we have grown the capabilities of our technology, both organically and through targeted acquisitions. This growth is driven by our intent to meet unique client requirements and develop systems tailored for specific client segments. Our adoption of modern, sophisticated technologies improves our process efficiency and infrastructure robustness. For example, APIs can streamline operations by offering unified solutions to diverse client bases. This approach also enables us to consolidate and reduce technology sprawl across different segments.

We are focused on removing duplication and overlap of responsibilities across teams. For example, in the future, we will not need multiple onboarding systems for private banking, retail, or commercial clients. The core functionalities remain the same, with small nuances enabling us to cater to those different groups in the right ways.

Digitising the bank also means streamlining outdated processes. Traditionally, many banks tend to focus on digitising the front end of their services so that clients have a seamless interface, while paying less attention to the back office processes, leaving them slow and complex. Our aim is to fully digitise the end-to-end client experience and re-engineer core processes of the bank to speed up turnaround times, reduce manual errors, and deliver sustainably higher returns.

As a bank, we are also responsibly experimenting with tools like generative AI across three key themes: generating and analysing content, enhancing communication channels, and improving engineering. We continually monitor emerging trends and technologies and are always on the lookout for new opportunities that could potentially shape the future of banking.

Building resilient, client-centric technology

The proliferation of new technologies unlocks new opportunities, but what is critical is how technology can help us improve our customer journeys. Technology is not just about making our core banking system and digital banking more resilient; it is also vital in helping us understand how our broader digital ecosystem services our clients.

By understanding the end-to-end client experiences and what can interrupt our services, we are well-positioned to respond to disruptions in a timely and resilient manner. This extends to the tools and capabilities provided by the third parties we work with. Building a service catalogue to understand the key components of our tech infrastructure allows us to stress-test those systems through scenarios, test what might go wrong, and understand the adjustments required.

While tools like generative AI have the potential to be incredibly helpful in easing the burden of repetitive manual tasks, we need to think about the risks involved. A combination of regulation, legislation, and collaboration between the public and private sectors to address these risks meaningfully is critical, and we are already engaging with some of our key regulators on this.

From a technology standpoint, these tools can support creating code, analysing code, and looking for vulnerabilities across our infrastructure. They can also help with creating design scaffolds that our engineers can easily add to, along with potentially bringing huge benefits to financial crime screening. What remains critical is ensuring confidential data is kept secure, and adequate controls are in place to allow monitoring of AI decision-making to identify any potential biases or hallucinations.

To thrive in today’s dynamic environment, banks need to prioritise operational resilience. A connected, continuous, and technology-driven approach to risk management empowers banks to not only stay ahead of the curve but also foster a culture of resilience that drives sustainable growth.