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Banks need to be banks, not software companies

It's a while since I wrote here but I felt compelled today. First, there was a reference yesterday to the now famous quote from BBVA CEO, Francisco Gonzalez "In the future, BBVA will be a software company". And then today I saw an article with the opening paragraph stating "Bankers need but one mantra today: 'my bank is a technology company, my bank is a technology company.'"

I disagree. 

I go to Apple for their technology. I go to Macy's for clothes. I go to my bank for their expertise in banking. 

In it's simplest terms, a bank Manages my money, provides me with Access to my money and allows me to Borrow money when I need it. Technology is an enabler of this - only an enabler. Technology should make this easier, more convenient, faster, cheaper etc. but banking is still what I go to the bank for. Technology and particularly software is becoming an increasingly important component of this (obviously I'd feel that way, I work in #fintech). And banks absolutely need technology to survive today and grow tomorrow. But they still need to be banks. 

Think about it - you don't buy an iPhone to have a piece of technology in your pocket. You buy an iPhone to access information, be entertained, communicate, etc. The tech from Apple is not the end in and of itself. It is a means to an end. A facilitator of other things. But I go to Apple for their expertise in technology, Netflix for their content (on my Apple tech), for the weather, and my bank for banking.

Now to put things in context, I don't actually think customers necessarily want "banks" per se. They want what the bank can facilitate - management of money, access to money and the ability to purchase things with credit. So if the primary goal is "buying a home", then the secondary function is "banking" and "technology" as an enabler of banking is tertiary.

I'm a technology expert. My clients are banking experts. Together we do some cool stuff. Why should there be a need to combine both in to one? Does the architect need to be the builder and the carpenter and the plumber?  

I believe banks should be banks, not software companies. Look forward to comments. 



Comments: (3)

Clive Munn
Clive Munn - MFTSE Affairs S.A. - Luxembourg 31 August, 2015, 06:491 like 1 like

I absolutely agree. Much better to listen and observe the good things banks are doing and how technology can help them rather than all the bad stories and why they should disappear. An innovative finance industry is the best chance we have of reducing poverty and improving global outlook. Sometimes new financial organisations are built from technology, sometimes they are not 'regulated banks' such as person to person lending, crowd funding or microfinance funds but technology is the enabler just as it is for travelling to space. Thank-you technology, lets move forward together.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 31 August, 2015, 13:571 like 1 like

Totally agree. Having worked in the IT industry for 25+ years, I'll pull out all my money from banks and put them under my mattress if banks started working like software companies. More in my comments at

João Bohner
João Bohner - Independent Consultant - Carapicuiba 31 August, 2015, 16:41Be the first to give this comment the thumbs up 0 likes

Applause for the article!

I'm an architect in processes expert.

I'm working on a project which proposal is precisely to reduce the gargantuan costs of the IT​s of Banks at least 10 times!

This project shakes a lot the current 'Core Systems' by reshaping the way transactions are processed at back office.

And, yes, this is feasible!

Now hiring