If only…
‘If only’ is a common sentence starter for many of us that didn’t see a huge change coming soon enough to take advantage.
Technology is moving at a pace faster than ever – now is not the time to question whether or when it is possible
We would not be alone, as there are some spectacular quotes you can find littered throughout the last century or so:
- 1903 – The President of Michigan Savings Bank who said of Henry Ford’s motor car company: “The horse is here to stay, but the automobile is only a novelty, a fad.”
- 1938 – Darryl Zanuck, executive producer at 20th Century Fox (with over 100 movies under his belt): “Television won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.”
- 1943 – Thomas Watson, CEO of IBM: “I think there is a world market for maybe five computers.”
- 1995 – Clifford Stoll, a journalist for Newsweek writing about the internet: “The truth in no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher, and no computer network will change the way government works.”
- 2007 – Steve Ballmer, CEO of Microsoft: “There no chance that the iPhone is going to get any significant market share. No chance.”
I recently spoke with Charleyne Biondi from Moody’s who has just published a really good outlook report for Moody’s on AI. Speaking to her, she highlighted that such is the pace of innovation that only a month after her report, there have been significant technology announcements that have already changed the landscape: Nvidia’s Digits supercomputer, Google’s Willow quantum chip, DeepSeek’s efficient AI model, and most recently Microsoft’s Majorana 1 quantum chip. All of these developments are arriving faster than previously predicted.
Despite this, we have all had conversations along the lines of: “Yes, but AI won’t replace humans for…”, or “With AI, we may lose some jobs, but we will create just as many new ones, if not more”, or “Who would trust an AI agent to manage their money?”
However, one thing is for sure: as technology gets better, faster, cheaper and smaller (in size), we will use and rely on it more. But what does this mean for banks and fintechs?
At the risk of sounding like a broken record, we all have to rethink our businesses and look at how fundamentally different the technology supporting us needs to be. This is because the majority of us are using aging technology that simply cannot compete with modern capabilities. It still amazes me how many banks are not working on improving or replacing their cores and the systems around them with new technology that simply achieves things that were not possible before. For example:
- Real-time analytics – gone are the days of analysing data offline overnight to create campaigns. In comes real-time digital engagement that takes into consideration data from a multitude of sources and responds at the point of engagement.
- AI-driven fraud detection – still using hard-coded patterns for fraud detection? In comes AI-driven fraud prevention with explainable AI for traceability.
- Batch processing – yes, there are still some pesky mainframes running overnight reconciliation processes for accounting. In comes real-time transaction processing and reconciliation.
- Still suffering system outages even though your software runs in the cloud? Now cloud-native core systems can not only achieve maximum resilience, but also better scalability and cost efficiency.
- Processes running across separate systems with humans bridging the gap introducing unnecessary friction? In comes agentic banking to accelerate processes so much that we actually build in friction because we need at least some.
In the early 90s, I was involved in a huge programme of work for business process reengineering (BPR) at a bank. However, at that time, we didn’t have the technology drivers nor the pace of innovation we have today. Yet outside the main project, a water-cooler conversation I had led to the creation of a prototype demonstrating how much better it would be for both the bank and for customers if we had a single customer view. At the time, this was true innovation driven by imagination of the art of the possible with technology. The CEO of the bank loved it, but the BPR project deemed it too radical, and the idea was eventually dismissed as being unrealistic. Needless to say, we all know how single customer view eventually played out.
Bill Gates once said: “We overestimate what will happen in the next two years, and underestimate what will happen in the next ten.” However, I would argue that the progress in the last two years has already exceeded the expectations of experts.
This week, I am again just saying that technology is moving at a pace faster than ever. So now is not a time to question whether or when it is possible. Now is the time to innovate. Go big and go bold or go home!
About the author
Dharmesh Mistry has been in banking for more than 30 years both in senior positions at Tier 1 banks and as a serial entrepreneur. He has been at the forefront of banking technology and innovation, from the very first internet and mobile banking apps to artificial intelligence (AI) and virtual reality (VR).
He has been on both sides of the fence and he’s not afraid to share his opinions. All opinions are his own – feel free to debate and comment below!
He founded proptech start-up AskHomey (sold to a private investor in spring 2023) and is an investor and mentor in proptech and fintech. He also co-hosts the Demystify Podcast.
Follow Dharmesh on X @dharmeshmistry and LinkedIn.
Read all his “I’m just saying” musings here.
