“In my kingdom,” as the Red Queen tells Alice in Wonderland, “you have to run as fast as you can just to stay in the same place.”
No one standing still can triumph, no matter how well constituted.
If this lockdown has given me anything, it’s more time with family and less time in airports. More time reading books with my kids is priceless. And despite a concerted effort to step away from technology and truly unplug, my brain always looks for parallels between the classics and the rapidly evolving world of technology (specifically banking).
Just five years ago, banks were threatened (some might say, “bombarded”) with a world of pain, should they not adopt new banking strategies to the ever present and fast paced digital world. Many new banks have come and gone. The old banks remain. The legacy systems remain too, sadly.
There is (of course) the threat of Big Tech sweeping in and vacuuming up all customers from the old custodians of funds but this will not happen overnight. And as a customer, this seems like a seamless, frictionless transition transferring funds to their big brother custodians of data. As a bank, white papers and committee meetings are a necessary evil, but if you were sitting on the digital fence before now, it’s time to cut through the red tape and mobilize a platform-based solution that satisfies your customer needs and wants both now and in the future. This will be a win-win for you and your customer base. Banks long to become true life partners of their loyal customers. Only through regular, meaningful interactions can we learn about our customers. Leveraging existing customer friendly front ends that produce meaningful data both bank side and for the customer is a starting point.
On a positive note, banks still have the advantage. Controversial? Conservative? Maybe. Banks are still trusted to hold our money. When people think banks, they think giant vault, security, lock and key — all backed, regulated and protected by the government. And for the banks, that’s great. But the banks have a responsibility to keep apace with tried and tested technologies. As a community, banks need to acknowledge the clear and present danger of alternative banking solutions outside the current monetary system. I’m not just talking PayPal or indeed crypto, I’m talking about any alternative that removes liquidity from the current system. Banks need liquidity to lend. Businesses need access to liquidity to operate and expand. Quick, informed decisions can only be made through real-time access to meaningful customer data. Such data is starting to slip away from banks and so the rise of alternative solutions for individuals and businesses seem increasingly attractive.
Many banks started to make these changes before this global pandemic. And kudos to them for leading the way. However, many too are lagging behind this much-needed digital transformation. And to those playing catch up, I turn to the Red queen again for some advice:
“If you want to get somewhere else, you must run twice as fast as that”
For now though, be safe and embrace open finance!
Signing off,
The Token Irishman
About Token
Token is the industry’s leading open banking infrastructure provider, with offices in San Francisco, London and Berlin. By putting a bank in every app, Token is creating the digital connectivity shaping the future of banking-enabled commerce.
Token’s open banking market platform enables banks and developers to set the pace of innovation in digital financial services, unrestrained by technical complexity and regulatory compliance.
By offering value-added payments functionality together with standardized, API-based access to over 3,000 banks across Europe and beyond, Token helps banks and businesses to drive new revenues through the creation and delivery of market leading open banking payment and data experiences.
