Building a Fintech, Nationwide.
Chief Architect Gary Delooze shares his thoughts on the speed of change in financial services.
Whilst Financial Services has been a challenging place to work over the past decade, it has not yet seen its share of the exciting, digital transformation that has transformed other industries, such as retail and media.
We are yet to see technology-enabled business model disruption on a major scale, in the way that Netflix changed video distribution, Uber changed transport and Amazon changed retail. But the Financial Services sector is now on the verge of this.
The past few years has seen the steady rise of the “FinTechs” – technology companies working solely in Financial Services, that typically transform one element of the value chain, such as providing a great new money management tool, or a new payment app.
And they are now being joined by the “PropTechs”, who are finding new ways of transforming the property sector. Added to the emergence of many new challenger banks and the advent of Open Banking, plus a fresh new wave of technology innovation that has given us machine learning, predictive analytics, blockchains and augmented reality, and we have a heady cocktail of change that has the potential to revolutionise the way we bank.
“ The next decade promises to be an exciting time, with many opportunities to work on disruptive transformation, on the leading edge of technology. ”
But whilst it might be tempting to think that the most interesting and rewarding work will be in a FinTech or challenger bank, it would be a mistake to overlook the larger, more established organisations.
Why is this? Well, the scale of change will be far more significant, the budgets (and challenges) are far larger, and they already have millions of customers on which new ideas can be tested.
They recognise they have a mountain to climb – transforming the old whilst building the new and keeping the lights on in a high-volume business – but they are driven by the opportunities and the challenges.
Most of these won’t come from the challenger banks or Fintechs, but more likely will emerge from the likes of Apple, Google and Facebook, who are starting to explore this sector in greater detail. And when these Internet giants join the game, established players know the playing field could change very quickly.
As a result, they are now investing in new digital channels, cloud platforms, APIs and microservices, integration technologies, data lakes and analytics – and starting to think in different ways, leveraging agile delivery techniques and more innovative test-and-learn approaches.
“ Anyone who had worked in banking technology just five years ago would barely recognise it now. ”
Take Nationwide Building Society as an example. With a technology spend of hundreds of millions a year and 15 million members they are certainly well established.
But they also have a history of innovation, having created the UK’s first Internet Bank, and more recently the first wearable banking app. And they are one of very few financial services organisations that have managed to deliver a new core banking platform.
But Nationwide is now accelerating their transformation, investing in new technologies whilst transforming the way they work with Innovation Labs, Scaled Agile and DevOps.
They are active in industry forums, shaping the future of Payments and Open Banking, and rebuilding their core technology and engineering capabilities.
Recognising the scale of transformation that the industry is going through, they are changing from a financial services firm that uses technology, to a technology firm in financial services.
In effect (and to steal their marketing strapline) Building a Fintech, Nationwide.