'World war for the client': Top banking execs say tech is the way to win

Key Points
  • Big global banks and financial services firms must embrace opportunities presented by technological innovation to survive, leading executives say.
  • "We are in the world war for the client," says Jose Vinals, group chairman of Standard Chartered.
  • Both Japan's Mitsubishi UFJ Financial Group and China's China's Ping An Insurance say they are using technological innovation to reduce costs, which includes reducing their number of employees.
Jose Vinals, chairman of Standard Chartered, speaks to members of the media following a news conference in Hong Kong, China, on Tuesday, July 31, 2018.
Anthony Kwan | Bloomberg | Getty Images

Embrace tech — that's the only way to survive.

That was the message delivered Friday by top finance executives, taking stock of their increasingly competitive industry. And that's not just pressure from the old guard: Technological advances and innovative non-bank "fintech" companies are forcing financial institutions to adapt to increasing customer demands for lower costs and faster service.

"We live in a world where customers want convenience, want low cost, want fast service, want solutions," Jose Vinals, group chairman of Standard Chartered, said during a panel discussion at a meeting in Tokyo of the Institute of International Finance.

"We are in the world war for the client," Vinals said. And, he added, not all banks will make the cut.

"And remember: If you think of the future of mankind, it is not the survival of the strongest, it is the survival of the fittest," he said, becoming the latest banker to use evolutionary terms to describe the dilemma they face.

Nobuyuki Hirano, chairman of Japan's Mitsubishi UFJ Financial Group, said banks that ignore technological advances do so at their own peril.

"Digitization is not optional," Hirano said at the same panel.

'Shock to our society'

For big banks, important benefits for adopting technology include the improvements in efficiency and productivity, Hirano said, noting, however, that they may come at a cost.

He recalled the reaction when he announced a five-year plan to achieve a reduction equivalent to about 10,000 jobs — or 25% of his firm's workforce in Japan.

"That gave a kind of shock to our society," Hirano said. "But that is the reality ... against the backdrop of a very tough market environment."

What is fintech?

So Lan Ip, senior vice president and chief risk officer at China's Ping An Insurance, provided a real world example of how her company is using artificial intelligence to reduce costs and provide benefits to consumers.

She said that, two years ago, Ping An's call center had 30,000 personnel, but through the use of AI has reduced the number by half and has a goal to slash it further to a figure in the "two thousands" in another year or two.