Ultra low rates, new regulations and the need to invest in updating their businesses mean many UK and global banks are struggling to make their cost of capital. This will drive changes to firms’ business models as they look to improve efficiency, resilience and customer experience. Technology is enabling unbundling of activities which historically were done under one roof.
While a more distributed model has many advantages, it is a far more complex system to oversee. For instance, many players which have historically not been regulated or held to the same standards are becoming active in core financial services processes. The Bank, and others, will wish to ward against this to realise the benefits.