Technology and Banking Disruption: Level playing fields or new rules?

The EY Strategic Growth Forum in Johannesburg grappled with how technology is disrupting banking; as a panelist in the forum I offered insights on some key questions.

New entrants, new tech, new thinking – what does this mean for the industry and how well are banks responding? FNB’s Innovators Programme continues to drive a successful culture of disruptive thinking that incentivises employees to find new ways of doing banking. Our recent CodeFest accelerated fintech such as blockchain, consumer analytics and geo-mapping; 250 developers worked through the night to build prototypes and compete for prizes in a Dragon’s Den. [paragraph 1 of 5]

How do large organisations ensure execution of such ideas? There is no magic formula; strong executive sponsorship that creates space and enables capable people to deliver – whether big back-office processes or agile customer channel innovation. Successfully out-innovating the market usually also requires partnerships, focused organic or inorganic skills acquisition and the willingness to ruthlessly de-prioritise non value-adding projects. [2/5]

An audience member asked why can’t banks use transactional data from business accounts to predict problems with cash flow and help manage their money better? FNB’s Instant Cashflow product is an online, interactive and free tool that shows historical and projected cash flows. Businesses can use this insight to move funds from investments or apply for an overdraft; the full Instant suite includes payroll, invoicing and accounting – a useful ecosystem of solutions for entrepreneurs. [3/5]

New startups appear to threaten traditional banking models – is this being taken seriously? Looser banking regulations in the UK have resulted in 29 applications from new players to challenge the big four’s 75% control of the market. The owner-manager culture at FNB means we can be very responsive – the startups also don’t have our assets but we need to think like they do about how we use them. [4/5]

So where do big bank’s start – what is the right model? Inside-out thinking (eg Larry Ellison / Oracle) drives scalable, enterprise-engineered architectures; outside-in thinking (eg Steve Jobs / Apple) drives customer centric channels and intuitive user experience. The right culture in a large organisation will integrate the best of both of these paradigms while a healthy boardroom debate will achieve the right balance between them in a low-growth economy – such as now in South Africa. [5/5]

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