Why Fintech matters for banks

A service request. The bank said the issue is in the base branch. And the branch is almost 90 minutes from my home. The concept of universal branch banking was tom-tom-ed by the bank earlier.

Now, when ‘cometh the hour, vanisheth the bank’. It is 9 days and running – the bank is citing issues about miscommunication and lack of coordination and missing of some KYC data.

The issues are not new. 5 years back, when I was heading the Mumbai business of an IT major, I happened to see that the banks’ IT landscape was a clear mess. The issue was around silo databases and applications, and multiple KYCs. Credit card application would not talk to the loan application, and those won’t talk to the CASA application. Funnily basic, but eerily difficult for the banks to see the point.

And cutting to today, the issues remain. Data integration and application integration, and lack of workflows still remain the main issues. And to note that Banks are the biggest spenders in Information technology is an oxymoron.

Enter Fintech. The ability of the new age thinkers and entrepreneurs don’t have a mess to deal with. This is a fresh start. And fintech startups have embraced the new age technologies like blockchain, AI, IOT and data science to make a big difference. India’s PayTM is an example of how democratization of payment systems has reached the vegetable vendor and the tuk-tuk driver.

And while I was reminiscing about this whole thing, the bank called up to say that there will be further delay as another chain of approvals are needed. I sighed. It was never about the technology or capital, which the banks have in abundance – it is about an attitude.

~ Ashok Subramanian

Ashok Subramanian is a serial entrepreneur & investor who has built Strategic and Technology Ventures through which he invests and advises on business strategy & growth.

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