Is the digitization of finance making human bankers obsolete?

The digitization of finance has been around for as long as the calculator and even ATM machines, but new technology is forcing traditional banks to change at a faster pace than ever before — and forge new partnerships to compete.

That’s the view of Julie Monaco, managing director and global head of public sector coverage at Citi, who says the acceleration of digitization that has happened in the last decade has driven the bank to change how it approaches potential rivals.

“We look at fintech (companies) not as disruptors the way we looked at them nine years ago. We now look at them as partners, because we invest in the partner together,” Monaco said at the Milken Global Conference in Los Angeles. “We’re using fintech as an accelerator to how we digitize.”

During a panel on Tuesday about the forces shaping digital finance, Paul Hamill, global head of Citadel, noted that the pace of change will certainly accelerate, but the more striking aspect of finance today is the cropping up of new players. Ten years ago, one would never expect to see firms such as Citadel or Google on a finance panel, he noted.

“It’s very, very interesting to see the potential acceleration, and because of the kinds of players we now see at the table and the capabilities that they have,” Hamill said.

“The future I think is going to be a lot more about collaboration.”

The future of banking also is changing the fundamental relationship between bankers and clients. Banking is primarily a relationship business, noted moderator Dan Primack, business editor at Axios. Often a human bank manager can be the driver of business based on his relationships and network, but that may be changing.

So, is the digitization of finance making banking relationships less important?

Michael Tannenbaum, chief revenue officer of the San Francisco-based SoFi — an online personal finance company that provides student loan refinancing, mortgages and personal loans — invoked what he called the 80/20 rule, where the majority of financial services perhaps could be solved with technology, and supplemented with high-end service from a financial services professional.

“Technology should be involved to serve the majority of clients — if you take a mortgage, a student loan, personal loan, wealth management — most people don’t need to talk to someone to get the day-to-day done, and five, 10 years ago, maybe they did.”

At SoFi, mortgage loans may be processed very quickly via technology, but when a client does have to call for human advice, “then that call has to be that much more high impact and better because the expectations are going up.”

While most of the panel agreed that the pace of change is speeding up, one panelist said change is still coming too slowly.

Many basic financial services, including mortgage applications still can take weeks and weeks, which Google’s Corrie Elston had considered a “solved problem.” Industries such as education and healthcare seem to be moving at a faster pace than segments of the financial services industry, he said.

“I’m quite disappointed,” Elston said. “I think it’s too slow… I see a greater propensity to push forward in education and healthcare, and less so from finance.”

LinkedIn is covering the Milken Institute Global Conference in Los Angeles. Do you think the digitization of finance is making bankers obsolete? We are also asking speakers and LinkedIn members to weigh in on these other questions: What role should technology play in finance? Or, how does one build a meaningful life in the age of technological disruption? Join the conversation by writing your own article here and include #MIGlobal in your post.