Financial Institutions in the Czech Republic Face Resilience Challenges Amidst Ongoing Disruption and Change
The COVID-19 pandemic has brought unprecedented challenges to the financial industry worldwide, including in the Czech Republic. A recent survey by a leading professional services firm found that Czech banks are not immune to these challenges, with many facing significant resilience issues amidst ongoing disruption and change.
The Impact of Technology on Resilience
Czech banks have been forced to adapt quickly to the new reality, leveraging advanced technologies such as cloud computing and artificial intelligence (AI) to maintain business continuity. However, this accelerated pace of technological change has also highlighted the need for top talent to navigate these new environments and ensure strong resilience.
The Importance of Data in Decision-Making
“The pandemic has rapidly increased customers’ reliance on digital services and platforms, but it has also reshaped their attitudes toward personal data privacy and altered their behavior,” said Mark Watson, EY Americas Financial Services Managing Director and Board Matters Deputy Leader. “Banks must protect this data and ensure that their sources are ethical, while also recognizing the broader obstacles they face with data.”
The survey found that Czech banks recognize the importance of data in informing decision-making, particularly for sustainable finance and environmental, social and governance (ESG) agendas. However, many lack access to the necessary data or struggle to make sense of it. This has led to calls for more creative thinking about the many “what ifs” banks now have to consider in an ever-more connected global economy.
Cost Reduction and Risk Management
In addition to data challenges, Czech banks are also facing pressure to reduce costs while maintaining risk management standards. The survey found that 29% of respondents are charting a pathway to reduce costs, which is expected to be driven by increased use of technology and automation.
However, implementing these technologies must be done with care, as regulators are increasingly asking questions about how banks manage the risks associated with AI and ML. Banks have come to realize that it is possible to invest in technology while dedicating the rest of their budgets to staffing and other priorities.
The Future of Banking in the Czech Republic
The survey concludes that the banking sector in the Czech Republic is more resilient than perhaps many realized, but its ability to survive new challenges and capture new opportunities will depend on its ability to leverage top talent, data, and technology.
“This is a critical moment for Czech banks,” said Watson. “They must adapt quickly to changing circumstances while also investing in their people and technology to ensure long-term success.”
Key Takeaways
- Czech banks are facing significant resilience issues amidst ongoing disruption and change.
- The accelerated pace of technological change has highlighted the need for top talent to navigate new environments.
- Data is critical in informing decision-making, particularly for sustainable finance and ESG agendas.
- Banks must protect customer data and ensure that their sources are ethical.
- Implementing technology must be done with care, as regulators ask questions about AI and ML risks.
- The banking sector in the Czech Republic is more resilient than realized, but its future success depends on leveraging top talent, data, and technology.