Technological innovation has revolutionized the banking industry. In the past, banks were limited to a brick-and-mortar model, requiring customers to come into physical branches to conduct transactions. Today, banks are increasingly moving to a digital model that offers 24/7 access to account information and management tools. This shift has made banking technology more convenient and accessible for customers, as well as more efficient for banks. In addition, technological innovation has made it possible for banks to offer new services such as mobile deposits and person-to-person payments. As the banking industry continues to evolve, technological innovation will play an increasingly important role in shaping the future of banking.
The changing nature of what it is “to bank” has been going through profound transformations, not in the least have been the movement of activities that had to be conducted in person in a branch to one’s own handheld smart device. The article lays out the comparison of two establish Financial Institutions and how they have been adjusting to the expanding integration of information technology to their industry practices.
Capital One is an innovator in the banking space. The first US bank to move all of its core processing to the public cloud, Capital One has, for years, adopted a cloud-first and open source-first approach to its software development. It has followed an open API strategy and is at the forefront of the adoption of microservices and containerization in the banking industry. Bear in mind that Capital One works in an industry that, if you believe the hype, simply cannot move to the cloud, cannot embrace agility, and need not look for innovation. Bucking the trend, indeed.
Mercator Advisory Group recognizes it is not necessarily the rate at which a FI implements technological innovation to better align with consumers that make a difference in the marketplace, but taking advantage of the agility afforded by IT is a significant factor. The pace of change in physical and virtual environments demands more FIs incorporate capabilities that allow them to be more responsive to consumers, while retaining a steady and reliable service that consumers look to FIs to provide. We delved into this idea in our report Banking as a Platform: API Technology Presents Opportunity to Financial Institutions.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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