Digital Banks Look More Like Big Tech And Vice Versa

I found it interesting to hear that many of the banks focused upon digital are studying, visiting, talking to and hiring people from the Big Tech firms. People with experience at Netflix, Alibaba, Amazon, and Tencent are in strong demand, especially those who can code. I always remember the comment from a former senior member of Deutsche Bank’s leadership team, Marcus Schenk, that the ability to code is now becoming as important as the ability to speak English in business, and that statement becomes more and more true all the time.

Interestingly, many of the banks that are committed to digital are getting their bankers on training courses in Python, and they are advertising new jobs with titles of data engineer and data scientist. Meantime, in a reverse play, the Big Tech firms that are trying to get into the low hanging fruit of financial services are hiring bankers. They don’t want them to code, but to explain the dynamics of how credit and payments markets operate, how the profit is made and to assist in designing new hybrid products that allow Big Tech firms to operate financial products with light regulation.

What this tells me is that technology – digital – and finance – banking – is merging. I foretold this would happen in the 1990s, but was way too early off the mark. Some twenty-five years later, it is now coming true. I wonder what will happen in another twenty-five years?

If I was a betting man, which I am sometimes, then I would put a marker firmly down today to say that it will be very difficult to tell the difference between a Big Tech firm and a bank in 2045. Structurally and operationally they will look very similar. Their human resources and management will look the same. Their buildings and offices will be identical. The only difference will be their product and services.

Now that is no wild statement, but a result of the fundamentals of the digital revolution and I could just as easily have said the above about a retailer, entertainments business or any other services focused company. They will all look the same as Big Tech firms, apart from their products and services.

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