I’ve blogged quite a bit about adapting to change lately, and will continue to do so as banking-as-usual (BAU) is not an option. It’s similar to standing in the middle of the road. If you stand there for long enough, you’ll get run over. This is as true in banking: if you stop changing, you die. Now banks know this – they’re not stupid – and have been changing a lot over the past decades. Since I started in banking, we’ve seen the mass adoption of ATMs; the introduction, growth and move to offshoring call centres; the deployment of online and now mobile banking; the rise of algorithmic, high frequency trading; the drive towards server farms co-locating next to the stock exchanges; and the big trends towards blockchain, cloud and machine learning overall.
This is why banks are as strong today as they’ve ever been, and I think that anyone who says that banks don’t change or are doomed is an idiot. They’re not doomed unless they stop adapting to change and, so far, banks have done a pretty good job of adapting to change.
In fact, name me one bank that has failed due to technology? I cannot think of one. Ever. I can think of many who have failed due to poor risk management, but failing due to technology is just not happening. Will it?
Well, I guess it goes back to my story of the technologist who cried disintermediation: it will only happen if a bank resists change. If a bank resists the march of time and this was the point of my ticking timebomb blog yesterday. Banks will be doomed if they resist changing legacy systems, especially those at the core.
Now when I blog about getting rid of core systems, many people ping me a note saying it’s not necessary. You can build adjacent systems that such the data out of the legacy and analyse and use it to feed APIs and apps. In other words, you build middleware to reach into the graves of the old data processing systems and suck out their knowledge. I personally don’t think this is an advisable approach to a long-term future, as sucking the data out of the dead is not really a viable strategy for the next century, is it?
