Barclays’ PingIt: An isolated example of bank innovation?
Today’s digital capabilities bring several new ‘features’ to the market, which are transforming most, if not all industries. In particular – virtualised, cloud-based processing architectures, hosted by third parties (AWS for example) or managed internally, as a ‘private’ cloud.
Banks have been slow to adopt cloud-based processing – among other innovations – essentially running outdated, inefficient and expensive kit. They are also less able to take advantage of the benefits of such technology, such as cloud’s scalability when testing or rolling out new services.
Basically, banks aren’t keeping up with innovation. Isolated examples of genuinely new services – such as Barclays’ PingIt – are beacons in an otherwise empty wasteland. Banks claim to be held back by governance criteria, but that hasn’t stopped companies like PayPal making wholesale moves to adopt such platforms.
Many of today’s innovations in the financial space revolve around the peer-to-peer model – platforms enabling businesses and individuals to interact directly and remove intermediaries.
It’s in this innovative and boundary-pushing space that freemarket operates, not to be disruptive for the sake of it, but as a symptom of what is now possible with technology. Driven by such technological advances, the financial services landscape is diversifying way beyond the traditional scope of banks.
While it might seem surprising that banks have not clambered aboard the peer-to-peer bandwagon (or innovated in other ways), the fact is, they are not straightforwardly able to do so. Too many internal systems, processes, working practices and outdated thinking get in the way.
The consequence is that customers of traditional banks are paying the price for their bank’s inefficiency. Banks do many things right, but too many services come at a cost that should no longer be suffered by their customers.
And with companies like freemarket coming into the market, nor does it have to be.