and if you can’t do that then you’ll go out of business pretty quickly these days.
Bridgewater: Regulation is set to increase, which will not be just about capital adequacy and meeting prescribed ratios but also about the demand for regular information. Regulators will require information to be more precise, accurate and timely. Robust technology will be required to deliver on these new demands.
Also, if you consider changes in customers’ demands, customers are looking to bank 24/7, and to be able to select the specific services they want on a bespoke basis. Again, you require robust technology to deliver on this new set of demands. Therefore, technology is an imperative if you are going to be able to deliver on the demands of customers, shareholders, and regulators.
Maiato: The opportunity from a technology standpoint is to reduce the cost of compliance and adhere to regulation. Basel III has a lot more risk factors that you need to report on and that’s only going to increase.
Additionally, technology will allow banks to provide more customised banking products and services. Almost all the banks in Bermuda have made significant investment in technology with a focus on serving customers better, faster, more cheaply and increasing the channels of distribution. They’re starting to leverage the technology to help them understand their customers and their needs.
This is helping them recognise trends and buying patterns and allowing them to move away from a solely product-based offering towards a more customer-centric offering. Technology is a massive opportunity, but it has to be balanced with costs and return, because technology in a finite market is a huge investment that may not have the same return characteristics as it would in larger markets.
Horton: There is considerable potential in terms of delivery channels, being more nimble, bringing products to market, giving customers access wherever they are in the world to your bank. It’s also the only way
we’ll be able to cope with the increasing regulatory demands whether they be domestic or international. Particularly for us as a small bank, if we weren’t looking at the technology that’s available there would be no way we could cope—you have to use it to retain productivity.
Collins: Bermuda banks, given our environment, are much more complex than most people would realise and we all have different international investors. Butterfield for example is an $8 to $10 billion bank, and if you compare us to an $8 to $10 billion bank somewhere in North America, the difference is that we’re multi-currency, we have straight-through processing and global banking.
So we’ve created, and this is true for all Bermuda banks, a technological platform that is disproportionate in complexity, ability and cost relative to our scale and size. It’s a constant struggle because in some respects we’ve got technology that’s like that of a much bigger bank and that’s where our client expectations are, but we don’t enjoy the scale of some of those banks.
Swan: Appetites are shifting, you have to have new products and services and the ability to distribute and service products globally, 24 hours a day. It is not just about the people coming here, but also allowing the banks to expand well beyond our borders to other markets and attract an inbound deposit base.
Collins: It’s an expensive period for the banks because we’re going through a demographic generational transition. A large part of the population actually wants to come to the bank and do banking face-to-face, and we have to provide that service, but at the same time we have a different demographic who never come into a bank and want to do everything online. It’s an expensive proposition to keep both of those services going as the transition occurs.
Truran: As an institution, we invested heavily in technology in 2008 and we repeated that exercise in 2012 in order to better support our clients and achieve some of the efficiencies that we’ve talked about. There’s a slightly different mindset now with regards to technology, and it’s perhaps not about building infrastructure that costs huge amounts of money and takes seven to 10 years to get paybacks.
57 Bermuda Finance | 2014
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