Skip to main content

POST Well, yes, banks are technology companies

The “meme” that banks are, essentially, a special kind of technology company (special because they are granted special privileges that other companies do not have, such as the ability to create money) is common.

Here's what Christian Edelmann and Patrick Hunt said in the Harvard Business Review: "Technology specialists will play a greater role in allocating investments, working alongside senior management from a more traditional background". From my early experiences as an advisors to boards, I can see the dynamics at work here. To pick an obvious topic, some financial organisations' early response to open banking was to see Application Programming Interfaces (APIs) as something to do with technology and therefore not strategic. This left them on the back as

 

xxx

Instead, du Toit predicts, banks will partner with Amazon and others. Lenders would manufacture financial products, and tech giants would serve as distribution and servicing channels. In other words, what Amazon already does with consumer goods.

Yet because distribution accounts for two-thirds of banking profits, according to a McKinsey & Co. report, banks may not love being relegated to mere factories for mortgages and credit cards.

From Consumers Want Tech Firms to Take On the Banks - Bloomberg

xxx

xxx

And because Amazon wouldn’t have to pay to lure customers -- it already has millions of them -- it could afford to set up digital accounts without “all the nuisance fees and relatively high minimum balances” that lenders impose

From Consumers Want Tech Firms to Take On the Banks - Bloomberg

xxx

Comments

Popular posts from this blog

There is no excuse for not taking cards

So we went to the pub. For lunch. Seven of us. Say £20 per head. £100+ quid. Say £50 quid gross for the pub. Colleague goes to order food and drinks and pay at the bar. Apologetic barmaid comes over to explain that their “card machine” is down, so she can only accept cash. Under normal circumstances I would have simply walked out, feeling it wholly inappropriate to reward such a poorly managed establishment and, as a functioning actor in a capitalist economy, done my duty to depress their lunchtime takings. Here’s what we wanted to say: This is absurd. This is 2016 not 1916. Your card machine is down? Well, so what! Are you seriously telling me that mein host has no mobile phone number capable of registering for PingIt or PayM? That none of the staff or the pub itself have a PayPal account that I can send the money to? That neither the owners nor managers not contingency planners thought to tuck an iZettle behind the bar to use when the clunky and expensive GPRS terminal fails for o...