Firstly, I have to say that I love the website and look forward to reading the blogs going forward. I was asked to put up a few initial thoughts of my own and with the buzz on FinTech thought I would start there.
The evolution of technology is taking many industries to places they perhaps thought were not previously possible. The leverage and scale now achievable with minimal hard infrastructure is something that should excite the eco-friendly part of the world.
Branchless banks, sharing extra housing space (Airbnb), sharing of cars (Uber) are all leading to decreasing waste and material savings in energy consumption. The optimization of resources has accelerated the growth of intelligent technology.
The big question for many financial organizations is how they develop themselves for today and future needs, which leads us back to the buzzword -FinTech. What does it really mean? It feels like an agenda where many organizations are heading to acquire something they feel they’re missing. FinTech isn’t a department or a project to acquire some slightly improved technology or know-how used to tap into the Silicon Valley flavor that will produce change.
The evolutionary change required by banks is a cultural one that focuses on thinking outside the box, which typically comes with these new age technology led organizations. Banks are people oriented firms supported by technology when the goal should be a technology organization supported by people. This change is not something many banks are close to achieving.
Perhaps it’s due to the over regulated capital constrained industry we now live and work in that has led us to live in this self-styled box. But, before we finally break out of this box the goal should be not just to leap into the next box but to fundamentally alter the culture.
Banks were the pioneers that facilitated capital markets and drove the growth of the market economy for years. Today, the banks feel more like the followers than leaders. To reverse this, they desperately need to change their culture from being centered on archaic annual KPI reviews and competition to one led by collaboration and technology. That’s the recipe that’s driven the success of both Silicon Valley and the products they produce.
For those banks looking for a FinTech agenda to solve their problems, they are sadly mistaken. Banks, like any organization, wishing to evolve must do so from within. Otherwise, they simply move from one box into another and although it’s a shiny new box, it’s still a box.