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Open Banking – Big Tech’s in Banking? Nothing new.
There was a very strong article last week titled “Big Tech’s Invasion of Banking” which illustrates how Silicon Valley is waking up to the benefits of going after the financial sector. The one thing that creates risk is regulation and how to control their movements but the scariest thing by far is that consumers would have no problem in moving to a big fintech financial product.
But what is it that I do have an issue with? Various people, to include myself, that speak at conferences have been saying this for at least 2 years!! “The GAFA’s are coming, the Chinese fintechs are coming”. But, in a number of cities or in speaking to executives from large institutions, this was not taken seriously. It has been said that the most tech advanced financial institutions are at least 5 years behind any big fintech that goes after the financial sector. In five years that financial institution that will try to catch up, in a millennial market, will likely disappear (yes, eyes will role just like they did in these past 2 years when they read this past statement).
Changing Culture
Let me be very clear, I do not want to see financial institutions disappear as we know them, but innovation will simply make that happen whether we want to or not UNLESS, unless financial institutions can quickly make the changes necessary.
What changes:
Open Banking Will Go Away. No.
Financial institutions, in some cases, are/were just sitting there watching like this is a flu that will/would simply go away. It is not. According to some people, Open Banking was going to go away and disappear. Well, it won’t because everyone in the world understands the power of consumer data. So, for those that were hoping it would go away, it has only gotten worse because we are now talking about open finance and open data.
This is even more challenging for financial institutions. Why? Because payments and cross sector products and services will mean even more now for any big fintech that is looking at even better commercial reasons to step in. The time of brick and mortar multi branch bragging days are long gone.
http://www.milkenreview.org/articles/big-techs-invasion-of-banking
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