Today’s landscape of traditional Banks and Institutions versus Neobanks and FinTechs is in for some big waves and changes.
The traditional banks have been able to “digitalize” with mixed success. They implemented the mandatory systems in order to stay relevant and continue to participate in the systems that provide foundational services. In these highly specialized settings while being dragged down by legacy systems and siloed organization, heavily impacted by 90 IT paradigms, most environments are not appealing for the CS engineer under 30 years old.
But they essentially over time installed and build systems that corresponded on business needs and requirements.
About 10 years ago, mindset and culture shifts were introduced in companies called “Customer Centricity”. Otherwise known as outside in thinking, this movement is even more challenging for Financial Institutions to implement and achieve.
So over the past 20-30 years, banks having retail banking services in Europe were occupied with:
- Regulatory changes, introduction of the Euro, SEPA rollout, prudential supervision, AML changes, GDPR, MiFiD, etc…
- Digitalization and dealing with legacy, COBOL & mainframe use, Y2K, interface changes, SEPA,
- Switch to customer centricity mindset, customer first thinking
That brings in NeoBanks, they have the following advantages:
- Just enough regulatory burden. Most are just getting to feel the crack of that whip when their Buisness is already well established
- Born Digital, they don’t have a non-digital workflow, and they find solutions that fit in that context
- Customer centricity, implicit, they scratch the itch the customer has first, and then organise and deal with what is needed for that later.
Disruption happens when the incumbents are taken by surprise. And in different markets, this is exactly what happened.
This will be a set of articles where I express some views and opinions on what is happening. I hope that some of the topics will be informative and entertaining.