Reports of our death are an exaggeration: Difference between revisions

Reports of our death are an exaggeration (view source)

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-Apple, Amazon, and Google ''wipe the floor with any bank on technology'' is presented ''[[res ipsa loquitur]]'' — we can go with that without any first hand evidence, just based on how lousy bank tech its — and, sure, the FAANGs have better standing with the public. Who doesn’t love Amazon? Who ''does'' love Wells Fargo?<ref>Though we think Mr. Perez rather confuses the product for its manufacturer. We might feel different about Amazon if, rather than making neat space-aged knick-knacks it made a business of coldly foreclosing mortgages, and charging usurious rates on credit card balances. You sin’tctg7nk it would? Have you seen the cut it takes from the play store?</ref>
+Apple, Amazon, and Google ''wipe the floor with any bank on technology'' is presented ''[[res ipsa loquitur]]'' — we can go with that without any first hand evidence, just based on how lousy bank tech its — and, sure, the FAANGs have better standing with the public. Who doesn’t love Amazon? Who ''does'' love Wells Fargo?<ref>Though we think Mr. Perez rather confuses the product for its manufacturer. We might feel different about Amazon if, rather than making neat space-aged knick-knacks it made a business of coldly foreclosing mortgages, and charging usurious rates on credit card balances. You don’t think it would? Have you seen the cut it takes from the play store?</ref>
 Therefore, Mr. Perez’ argument goes, the only place where banking presently has an edge is in regulatory licences and approvals, capital, and regulatory compliance. It’s wildly complex, fiendishly detailed, the rules differ between jurisdictions, and the perimeter between one jurisdiction and the next is not always obvious. To paraphrase {{author|Douglas Adams}}: “You might think GDPR is complicated, but that’s just peanuts compared to MiFID.”
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 Thirdly a cool gadget maker that pivots to banking ''and does it well'' has as much chance of maintaining millennial brand loyalty as does a toy factory that moves into dentistry.
-Those Occupy Wall Street gang? Apple fanboys. ''At the moment ''.
+Those Occupy Wall Street gang? Apple fanboys. ''At the moment''. But it isn’t the way trad fi banks go about banking that tarnishes your brand. It’s <nowiki>''banking''</nowiki>. IT’s a dull, painful, risky business. Part of the game is doing shitty things to customers who lose your money. That ''isn’t'' part of the game of selling MP3 players.
-The business of banking will trash the brand.
+''The business of banking will trash the brand.''
 ====Bank regulation ''is'' hard====
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 Why surrender before kick-off like that?
 ===A real challenger bank===
 Programmatisation has its place.
-They are the irreducible, ineffable, magic difference between excellent banks and hopeless ones: the transparent ''informal'' networks by which it mysteriously navigates all kinds of terrain like some hovering, morphing jellyfish. Sundar Pichai can’t code that. The same human expertise the banks need to hold their creaking systems together, to work around their bureaucratic absurdities and still sniff out new business opportunities and take a pragmatic and prudent view of the risk — this is not a bug in the system, but a feature.
-Note how [[modernist]] this disposition is. The critique addresses only the formal, legible operational fame work. The chains of command. The [[silo]]es. The [[reporting line]]s. The [[dotted reporting line]]s.
+''People'' are the irreducible, ineffable, magic difference between excellent banks and hopeless ones: the transparent ''informal'' networks by which a good institution mysteriously ''avoids'' landmines, pitfalls and ambushes, while a poor one walks into every one.
-This is the view of the disembodied luminaries occupying the executive suite. They see only formal vulnerability, because formal structures are all they ''can'' see. Individuals are measurable by floorspace occupied, salary, benefits, pension contributions, revenue generated. Most employees don’t generate legible revenue. They show up on the map ''only as a liability''.
+Sundar Pichai can’t code that. The same human expertise the banks need to hold their creaking systems together, to work around their bureaucratic absurdities and still sniff out new business opportunities and take a pragmatic and prudent view of the risk — this is not a bug in the system, but a feature.
-From the executive suite, the calculus is obvious: why hire a dude to do what a machine could do cheaper, quicker, and more reliably?
+This is the view from the executive suite. They measure individuals by floorspace occupied, salary, benefits, pension contributions, revenue generated. Employees who don’t generate legible revenue show up on the map ''only as a liability''. The calculus is obvious: why pay someone to do badly what a machine could do cheaper, quicker, and more reliably for free?
-Therefore the model, articulated by Cryan and implied by Perez: ''prepare for the coming of the machines''. Automate ''every'' process. Reduce the cost line. Remove people, because when they come for us, Amazon won’t be burdened by people
+Thus, Cryan says and Perez imnplies: ''prepare for the coming of the machines''. Automate ''every'' process. Reduce the cost line. Remove people, because when they come for us, ''Amazon won’t be burdened by people''.
-===Yes, bank staff are mediocre===
+===Yes, bank tech is rubbish===
-Now, to be clear, the tech stacks of most banks are dismal. Perez is right about that. Amazon’s tech ''would'' wipe the floor with any banks tech: most are sedimented, interdependent concatenations of old mainframes, Unix servers, Windows terminal servers, and somewhere in the middle of the thicket will be a wang box from 1976 with a CUI interface that can't be switched off without crashing the entire network. These patchwork systems are a legacy of dozens of mergers and acquisitions and millions of lazy, short-term decisions to fix broken systems with sellotape and glue rather than maintaining and overhauling them properly. And banks are tech companies: you can't stop a bank and put it up on the blocks for 6 months while you rebuild it. (though covid: opportunity missed.) it is hard to rebuild the engine of a car while it is barreling down the motorway at 70mph. Banks didn't start thinking of themselves as tech companies until the last twenty years.
+To be sure, the tech stacks of most banks ''are'' dismal. Perez is right about that. Most are sedimented, interdependent concatenations of old mainframes, Unix servers, IBM 386s, and somewhere in the middle of the thicket will be a wang box from 1976 with a CUI interface that can’t be switched off without crashing the entire network. These patchwork systems are a legacy of dozens of mergers and acquisitions and millions of lazy, short-term decisions to fix broken systems with sellotape and glue rather than maintaining and overhauling them properly. They are over-populated with low quality staff. Citigroup claims to employ 70,000 technology experts worldwide, and, well, [[Citigroup v Brigade Capital Management|Revlon]].
-Per [[John Gall]]: [[The temporary tends to become permanent|temporary patches have a habit of becoming permanent]].
+To be fair, it ''is'' hard to imagine Amazon accidentally wiring half a billion dollars  to customers because of crappy software. Banks do have a first-mover disadvantage here, as most didn’t start thinking of themselves as tech companies until the last twenty years, by which stage their tech infrastructure was intractably convoluted.
-We presume Google and Amazon, who always have, are better and more disciplined about their tech infrastructure than that.<ref>See the [[Bezos memo]].</ref>
-The tech stack can give them wings, but they have to decide where to fly. They narratise. They bond, form networks, make connections, ''persuade''. These things a machine cannot do.
+We ''presume'' Apple, Google and Amazon, who always have thought of themselves as tech companies, are naturally better at it and more disciplined about their tech infrastructure.<ref>See the [[Bezos memo]].</ref> But you never know.
-So, note the category error bank leaders make in seeing technology as the competitive threat  it is not. It is just the ticket to play.
+In any case, a decent technology platform is a necessary, but not sufficient condition to success in banking. You still need gifted humans to steer it, and human relationships to give it somewhere to steer to. The software won’t see itself. Bank technology is not, of itself, a competitive threat  it is not. It is just the ticket to play.
-This is not to say banks employees an unusually are gifted, intelligent bunch. You are invited to read other pages of this site for our views on that. Commercial banks act as boggling flywheels ''despite'' disastrous tech and a surfeit of mediocre, bureaucratically-conditioned staff.
+=== Yes, bank staff are rubbish ===
+We lionise the human spirit in the abstract. This is not to say we sanctify all bank employees in the particular.  an unusually are gifted, intelligent bunch. You are invited to read other pages of this site for our views on that. Commercial banks act as boggling flywheels ''despite'' disastrous tech and a surfeit of mediocre, bureaucratically-conditioned staff.
-Imagine setting them free: automating the truly quotidian stuff, re-emphasising away from bureaucracy as the greatest good,and towards relationships management and expertise?
+Imagine setting them free: automating the truly quotidian stuff, re-emphasising away from bureaucracy as the greatest good, and towards relationships management and expertise?
 Imagine a bank strategy that said the in