April 6, 2016
Publication: Banking Technology
Platformification — what is it and why do banks need to know about it? Hans Tesselaar, executive director at Banking Industry Architecture Network (BIAN), explores the issue.
When alternative fintech players first established themselves in the financial services industry, they raised their profile by collectively bashing the banks — positioning themselves as a more transparent, simple alternative, at a time when distrust in high street banks was at its peak. In their defence, banks tried to dismiss fintech enterprises as inexperienced cowboys. However, over time both have come to realise they are better together, working collaboratively, than against one another.
Fintech companies have a distinct advantage when it comes to developing innovation that appeals to customers’ increasingly technology-focused expectations. Built on flexible platforms — often on cloud-based technology — these organisations are able to adapt and evolve quickly in line with the fast pace of the financial landscape.
In contrast, traditional banks rely on outdated IT systems that were developed in a pre-internet era. These systems have become a convoluted mess as banks have added on layers of technology in an effort to modernise.
Nonetheless, that same legacy and heritage is also the banks’ biggest asset. What the banks lack in speed to innovation, they make up for in experience, support from the regulators and connected networks — all of which fintechs are comparatively lacking.
It is understandable then, that after years of condemning one another, we are starting to see collaboration between the old and new players in finance. We’ve seen banks introducing heads of fintech, accelerators launched by high street banks to fund the future leaders in the industry and referral partnership deals.