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Banking and technology go hand-in-hand

It occurred to me today that many of the revolutions in banking have occurred as a result of technology change.

For example, the mainframe enabled back office automation of accounts to support banks becoming national and international behemoths. Without the power of the mainframe systems of the 1960s, Visa, MasterCard and SWIFT would not exist today and the Head of Data Processing was the job we all wanted.

Then the introduction of minicomputers switched the focus of automation from back to front office, with mini and supermini systems creating branch automation services that fed from the mainframe back office. Without the power of the minicomputer systems of the 1980s, First Direct would not exist today and the Head of Information Technology was the job we all wanted.

This was followed by the Wintel revolution of the 1990s, and computing power moved to the desks of customers, away from branches and head offices. The result was a powerful change to systems and structures, and our IT Managers became heads of Information Services.

The result was another major change in banking, with internet banking or online banking being a big investment point. Branches were closed and Bank of America became the biggest online bank, servicing millions of customers directly in their homes.

This has been superseded in the 2000s by the broadband era.

Just in the past five or six years, we have leapt from 28 and 56 kbps dial-up lines to the interactivity of 2 to 20 mbps high speed connections.

This has meant that customers are now in control.

They are socialising, servicing and entertaining themselves via their systems, and banks no longer control the office or branch.

The branch is now just an icon on a laptop or desktop.

This is why the Head of IS and the CIO is now the CTSO – the Chief of Technology, Services and Operations. 

Everything in the bank is being run by technology.

All the services and operations.

Hence, technology today is the bank.

And just as we get to grips with this revolution of socialising via technology, the technology moves into the pocket as customers carry it around with them 24*7 in the form of a smartphone.

Hence, we now see MoBank, Jibun Bank and m-Pesa becoming a reality.

From behemoths to micromoths, technological revolutions are creating banking revolutions.

I wonder what the next one will be?


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About Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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