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Banking customers now expect digital experiences on par with those delivered by leading e-commerce and technology companies, and emerging financial technology (fintech) companies are racing to provide these kinds of experiences. Innovation today requires some degree of cloud transformation.
At the same time, deregulation fuels massive investments in fintech startups and opens doors for tech giants to point their data-centric innovation engines towards financial services. Consumer, commercial, and investment banking choices have never been so abundant—or so easy to access.
Are these business silos slowing down the rate of change and innovation? Technology strategies and legacy technologies are another big challenge for banks. Many banks’ digital initiatives are held back by their technology strategy and legacy technologies: Ancient core solutions need complex enhancements.
Three years ago, I wrote that the unstoppable forces of Fintech were running into the immovable force of financial orthodoxy. That the survivors will be those who follow a "tortoise" strategy: That means working with investors with a low cost of capital [.], What does the FT article recommend? and avoiding yield-hungry hedge funds.
Isn't this the very existential threat that leaders of incumbent companies are supposed to be responding to through inventive and innovative means? For example, Fintech firms are under increasing regulatory pressure, as well as applying for banking licenses. That seems like a paradox.
There was a market, but no obvious winning strategy. An intermediary couldn't crush the competition with customer love, innovation, tech firepower, or scale. The only strategy was to hope that your competitors ran out of cash before you did. Infrequent site visits meant that user experience wasn't going to provide an edge.
Consider healthcare: although medical costs are much higher today in nominal terms than they were in 1970, they are much lower in real terms when adjusted both for monetary inflation and medical-technological innovation. a dearth of innovative new technologies).
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