Rewiring Banking DNA with Smart Tech Investments — Part 2
Part 2 of the BCG Tech in Banking 2025 analysis. Only 20% of banks have mature data quality frameworks despite sitting on vast data pools. Top performers are rebuilding three core tech muscles: data foundations, talent architecture, and IT infrastructure — treating each as a competitive asset, not an operational cost.
Rebuilding Banking Tech DNA: From Compliance Cost Centres to Competitive Engines
In Part 1 of this series, we uncovered how bloated Run-the-Bank spend and legacy complexity undermine banking transformation efforts. Part 2 explores how top-performing banks are redesigning core capabilities across data, talent, and IT infrastructure.
This edition draws on BCG’s May 2025 report “Tech in Banking 2025: Transformation Starts with Smarter Tech Investment.”
The Three Tech Muscles Banks Must Strengthen
1. Data Foundations: From Fragmentation to Intelligence
Despite rich data pools, only 20% of banks have mature data quality frameworks. Winning institutions are:
- Assigning clear data ownership by domain (customer, transactions, risk)
- Using GenAI for lineage mapping, quality control, and metadata tagging
- Enabling AI-driven personalisation, fraud detection, and real-time insights
GenAI is already boosting productivity by 40–70% in lineage mapping and data onboarding tasks — making the data foundation work faster and cheaper to build.
2. Tech Talent: Shift from Roles to Skills
Legacy hiring models do not work anymore. Top banks are:
- Moving to skills-based architecture with 100–150 core tech skills mapped to business outcomes
- In-housing 70–80% of tech staff to protect intellectual property and build institutional knowledge
- Using Global Capability Centres (GCCs) not for cost arbitrage, but for innovation and resilience
40% of banking tech roles will require retraining or replacement within three years (MIT CISR). The institutions building reskilling pipelines now will not be scrambling for talent when the transformation inflects.
3. IT Infrastructure: From Cost Centre to Strategic Asset
Most banks still view infrastructure as overhead. The modern approach:
- Virtualises infrastructure for modular, on-demand services
- Monitors real-time consumption, costs, and SLAs
- Builds self-service platforms that reduce dependency on internal IT bottlenecks
A US bank virtualised its infrastructure and enabled cloud-native transitions, reducing regulatory overhead and boosting speed-to-market significantly.
The Future-Proof Tech Playbook
To win the digital transformation race, banks must:
- Simplify their operating model
- Reallocate Run-the-Bank spend to Change-the-Bank investments
- Build end-to-end visibility and ownership across the tech stack
- Treat technology as a business value driver, not just an enabler
The next wave of banking success will come from those who align tech, compliance, and customer value creation in one coherent strategy — not those who manage them as separate budget lines.
Source: BCG, “Tech in Banking 2025: Transformation Starts with Smarter Tech Investment,” May 2025.