Banks and technology
The banking sector has always operated at the cutting edge of technological advances. While technology initially took flight in the fields of science, aerospace and the military, the major tech players were quick to find markets for their massive mainframes in the banking sector. The advent of SWIFT interbank exchange networks in the 1980s made rapid, electronic transactions possible, whilst the trading and discount brokerage sites made their spectacular debut in the late 1990s, after which all retail banks developed their websites. These technological evolutions shaped the banking sector and the services provided to clients. No retail bank today could survive without a serious online offering.
In the space of a few decades, through continuous and significant investment, basic banking functions such as account holding, payments and securities transactions have been digitalised, automated and accelerated, substantially reducing workforce needs in back offices and support functions.
The widespread use of, and investment in, digital technology, combined with the restrictive regulatory environment, largely explains why the banking world has not been heavily disrupted by the arrival of new tech players. Retail banks may yet be subject to strong pressure from fintechs in terms of the performance of the services provided (instant transactions, pressure on transaction fees) and their user-friendliness (intuitive interfaces, fully digitalised onboarding), but not to the extent of fundamentally changing the landscape of the industry.