Banking and Technology

Even though I don't work in the Financial Services Industry anymore, I still keep up with many of those that do and usually find it an interesting area to read up on and discuss. This week, Ron Shevlin posted "Banking is Not a Technology Business" where he discusses "technology companies" like Mint and BankSimple.

I read the article, chewed on it for a while, and finally decided to comment. And then, when I actually started typing, my comment got freakishly long. Since it was turning into a blog post, I thought I make it one...

(For context, it's probably valuable to read both the article and the comments of Ron's article.)

----

I don't have this 100% pulled together, but I'll give it a shot so I can get to the long weekend without this on my mind...

As technology becomes a bigger part of the advancements that almost every industry is undertaking, I do believe that it opens opportunities for "technology companies" to invade the space.

When I look at Apple in media distribution (and soon to be in advertising), Amazon in "everything" distribution, Google in the Advertising space I see companies that first and foremost are technology companies and have found ways to use their technology to make money in areas that lie outside of traditional hardware and paid software models. These technologies have impacted how these services are consumed and created in a big way.

So companies are coming along that say "Look. The hardest part of industry/exchange/service is getting the technology right. I can be good at that and figure out the rest."

Bankers have taken the exact opposite approach. I know banking...I'll outsource the technology...and that may be working...but I hear more than a few complaints about the strangle hold core vendors have on banks...so maybe it's not.

I'm starting to think that as services become commoditized they become ripe for technology companies to not only invade the space, but become leaders and game changers. I hear many that say banking is moving towards (if not is already at) a commoditized level, so I think it's a very possible candidate. (However I do think that Bankings regulations help protect it from an all out invasion.)

Now as far as being clueless, not making money etc...I couldn't agree more. That said, being clueless and naive are different...and sometimes it takes naivety to try something that shouldn't work but somehow does.

At least I hope so...I'd hate to think I have to wait for 15-20 more years of experience in my field to do anything of significance in it...much less have an opportunity to extend what I know to other areas of industry. ;)