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Reports of our death are an exaggeration: Difference between revisions
Reports of our death are an exaggeration (view source)
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And it’s not the regulatory issues: if it were then you would expect tech firms to be awesome at ''unregulated'' financial services. | And it’s not the regulatory issues: if it were then you would expect tech firms to be awesome at ''unregulated'' financial services. | ||
==== | ====Techbros aren’t naturals at banking==== | ||
But — secondly — ''they’re not''. We’ve been treated to a ten-year, live-fire experiment with how good tech firms will be in [[Cryptobabble|unregulated financial services]], during which the banks — “[[trad fi]]” — and, notably, the FAANGS have mainly stayed away, ''and it hasn’t gone well''. | But — secondly — ''they’re not''. We’ve been treated to a ten-year, live-fire experiment with how good tech firms will be in [[Cryptobabble|unregulated financial services]], during which the banks — “[[trad fi]]” — and, notably, the FAANGS have mainly stayed away, ''and it hasn’t gone well''. | ||
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====Bank regulation ''is'' hard==== | ====Bank regulation ''is'' hard==== | ||
Fourthly it is naive, to say the least, to presume that regulatory compliance is formalistic, let alone “the easy bit of banking”. If you could solve it with tech, the banks would have. | Fourthly it is naive, to say the least, to presume that regulatory compliance is formalistic, let alone “the easy bit of banking”. If you could solve it with tech, the banks would have. Regulations change, contradict, don't make sense, overlap, are fiddly, illogical, often counterproductive and they are subject to to interpretation by regulators, who are also fiddly, illogical and not known for their constructive approach to rule enforcement. The consequences of getting regulations wrong can be enormous. Even apparently formalistic things like kyc and client asset protection. Banks already throw armies of bodies and technology<ref>are [[legaltech roll of honour]] refers.</ref> at this problem and still they are routinely find in the millions of dollars. | ||
===The gorillas in the room=== | |||
But in any case Park all that. For what Mr Perez overlooks as a core competence in a successful bank is the same thing Mr Cryan did: its ''people'". | |||
They are the irreducible, ineffable, magic difference: 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 take a pragmatic view — this is not a bug in the system, but a feature. Neither Cryan nor Perez seems to think it exists. | |||
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. | 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. | ||