Information technology research and advisory company Gartner has published a report “Banks That Are ‘Too Big to Fail’ Are Also Too Big to Succeed.”
Gartner cites higher levels of regulatory compliance, increased investment in risk management and technology advancements as stress points.
The report concludes that increased size and operational complexity as banks change focus from agility in response to external conditions to risk control creates performance drags by accelerating demand and complexity.
It says there is a “law of diminishing IT returns” under which any technological progress that increases the efficiency with which a resource is used tends to increase (rather than decrease) the rate of consumption of that resource.The paradox is that increased efficiency leads to increased demand.
As demand continues to rise, Gartner says the critical factor is not the number of devices, but rather the number of digital services offered via the Internet. These in turn, will continue to mean that efficiency gains in supply are overwhelmed by consumption.
For all financial service providers, new technologies, customer expectations and market conditions require closer attention to IT governance to maintain continuity of customer services.
