22 April 2018
Stanley Epstein
Stanley Epstein

Stanley Epstein

Stanley Epstein - Citadel Advantage Ltd

44Posts 187,827Views 52Comments
Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

Reflections on the fintech revolution

14 August 2015  |  6431 views  |  0

Have you ever noticed how we move through phases?

Looking back over my long career in the world of banking and banking technology, there were always those ‘new’ technologies that kept popping up. They would be the toast of the banking technology world for a while (in those far gone days we did not have names or concepts like ‘fintech’) and then as their glamour faded they would be replaced by something else.

Strange as it may seem, way before the birth of the Internet we had electronic banking. The newly developed PC and a dial-up modem connected our corporate customers to the bank’s mainframe as long ago as the early 1980s. Today’s ubiquitous easily accessible public Internet only became available a decade later.

Electronic banking always was just that – Electronic Banking. I was working in an Electronic Banking Division way back in the early 1980s. At that time the world ‘electronic’ was so new and modern and I guess revolutionary for the older (at that time) banking generation. I recall a legal boffin at one of the banks insisting on referring to it as ‘electric’ banking.

This was the age of the first ATMs – the teller that never needed sleep, nor holidays. EFT - Electronic Funds Transfer was the rage for a while, as was Electronic Commerce or E-Commerce. The next step up in this wonderful world was EDI (Electronic Data Interchange) which would be a wiz at getting all your data to the right place at the right time and in the right format. STP had taken on a whole new meaning and had graduated from the world of automobile additives to the world of technology and transaction processing in the form of Straight-Through-Processing. Even then we were already dabbling with voice recognition and biometric identification. The mobile phone (which was still only a phone until Apple changed everything) was a part of our remit – and we dabbled with SMS for alerts, notices, balances and the like.

In those days NFC cards were called ‘proximity devices’ and we dabbled in this too coming up with all sorts of uses for the new technology.

Stored value? Yes, we had Mondex. Remember?

Artificial Intelligence was still in the future but we were playing with ‘Expert Systems’ and had already invented credit scoring.

The technology vendors were forever bombarding us with new solutions begging us to find a problem that their solution would solve.   

In truth we found dozens of problems all solvable by the new technologies. In truth all these solutions were simply just not viable, either as a pure business proposition or because somewhere along the line the technology was flawed.

The same is still true today.

Just look at the modern banking scene with its miracle device – the mobile phone.

The mobile phone has given us mobile banking and mobile payments. Many confuse mobile banking with mobile payments, so let’s put that bogyman to rest before we take another step.

Mobile payments are having either stored value or an electronic version of your credit/debit card on your mobile. Nothing really new here – just a different human/system interface. Yes you guessed it. The new interface is just your mobile phone.

Mobile banking is simply putting your old Internet or online-banking onto your mobile as well. Add to it some of the abilities that the technologies on your smartphone gives you, for example a digital camera to image your cheque for deposit, or you for that matter to have a live chat with your own personal banker, plus all the old standbys of bank balances, statements, transfers and payments and the like and – hey presto! We now have a ‘new’ animal (now all the rage) called ‘digital banking’ (which of course can all be done from your old fashioned desktop or shiny new tablet too).

Of course, on the subtle (and perhaps cynical) side, what the banks have succeeded in doing is getting you, the customer, to do all the work (previously done by bank tellers or trusty bank clerks) and they (the banks) are charging you for the ‘privilege’ of doing their dirty work.  The ‘fintech’ revolution in its current incarnation as ‘digital banking’ has the bank’s technology loving customers (anyone under the age of 50) gladly doing all the work (essentially form filling and data capture) while the banks save oodles of money by no longer needing all those expensive, unreliable and ungrateful staff who really loved their careers. Now bank customers are doing all the work and are happy to pay for the ‘privilege’ in the sure knowledge that if they didn’t do it the bank would charge them even more than they currently do.

Yes, we certainly move through phases. And the more we change the more we stay the same.



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Stanley is a Director and co-founder of Citadel Advantage Ltd., an international consultancy to the financial services industry that provides specialist services and training in the areas of operation...

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