When bankers go tech

The Internet of Things seems to be all encompassing. Startups are cropping up in all parts of the world. Curiosity is driving market game globally. Digital transformation is replacing humans with computers. Innovation labs and venture funds are creating the right environment for risk taking.

Amidst all of this, inaccessibility to credit, infirmities in monumental banking institutions, and rise in mobile banking applications have only led to the latest development of bankers turning to technology.

Why are bankers going tech?

With the definition of professional success changing, and the yearning to start one’s own venture rising, bankers are no exception to the technological whirlwind. Bankers are finding the freedom to innovate and experiment without explanations, absolutely enticing. They are no more satisfied with working for some big, reputed firm and receiving a fat pay cheque. They wish to take risks, and create direct impact. These bankers however, are aware of the challenges involved in starting up an enterprise of their own. This realization has made them confide in what seems to be the panacea for most of their perturbations-technology. These concerns revolve around keeping expenses on associates, operations, and infrastructure as low as possible. This is quite understandable in light of the competition startups encounter. The enthusiasm to step out of the shadows of large, well-established institutions emancipates partly from the success stories of technology adoption in other sectors, and partly from sheer necessity. The weak economy that followed the global financial crisis of 2008, and the volatile nature of the banking and investment sector, has made bankers wearier than ever before. Huge banking institutions routinely decide to lay-off their junior associates as a quick fix to their operational losses. Coupled with a dubious environment like this is the fact that there is a dearth of job openings in the banking sector when compared with software and cybersecurity opportunities today. It’s an open secret, that all big banks today are scared of their lunch being eaten by the likes of Amazon, Apple, and Google, to name a few. These internet behemoths are building on their consumer relationships to gradually build inroads into payments. With the launch of Apple Pay and Samsung Pay, such a takeover looks like the immediate future. Big ecosystems like Facebook, Google, and Apple already have a large customer base. If they decide on rolling out financial services to these customers, in all probability, they might end up taking customers away from banks. Bankers are now using their financial expertise in association with technology, in two broad ways. The first route is that of starting their own firms offering solutions for tight financial regulations, investments, securities and commodities to name a few. This, they do by employing the latest technologies in the discharge of their functions. The other route is where bankers are using their domain knowledge as a stepping stone to exploit the plethora of opportunities in other unrelated domains such as e-commerce, software development, and website designing.

What’s in it for customers?

Bankers in technology. This is a win-win situation for bankers and customers alike. We’re all aware of how difficult it is to secure loans, especially for first time borrowers. These could be loans for business expansion or buying commercial vehicles or something else. Rules, requirements, and formalities differ from bank to bank. Moreover, loan application processes are complex and time consuming. Bankers therefore, have rightly sensed how technology could dramatically change the lives of customers. Technology simplifies the loan application process through measures like e-KYC, integration with credit bureaus for instant checks, digital signatures, and much more. Traditional banks will take time to adapt to all this seamlessly in their operations. This is due to the baggage they carry. Bankers, with their adoption of latest technologies, are in fact in a place where they are complementing traditional banks. This is resulting in business generation for banks and revenue generation for such bankers. When compared with other entrepreneurs, bankers are much more adept at handling money. Their specialized knowledge in efficient deployment of funds, attracts more customers to them in any venture that they undertake. Investors feel secure that bankers will not burn cash for futile customer acquisition.

What lies ahead?

With technology and banking crossing paths, there will be an explosion of data and opportunities. It would be interesting to see how bankers monetize this data through a combination of their domain knowledge and newly acquired technical know-how.