Using agile methodologies can help break down the barriers to understanding between techies and bankers, says Chris Skinner. 

I regularly use a quote by British comedian John Oliver that Bitcoin combines “everything you don’t understand about money with everything you don’t understand about computers”. But it goes further than that: you could exchange ‘Bitcoin’ for ‘cryptocurrencies’, ‘blockchain’ or ‘machine learning’ – almost anything really, as it is true on all fronts.

In fact, I would contend that financial people misunderstand what technology can do and technology people misunderstand what finance can do. A perfect example of the former is the C-suite people I meet who think digital is a channel, they must do blockchain as everyone is talking about it, and the very mention of artificial intelligence (AI) at an investors’ meeting will bump up the share price.

A great example of the latter is Bill Gates’s view from 25 years ago that we need banking but we don’t need banks any more. What he meant is that we don’t need banks to do payments, savings, investing, lending or such like, but banking is all about being trusted to deal with risk between counterparties. It is a separate area, and we need banks to do the bit that is actually banking.

This misunderstanding is therefore misunderstanding squared. Banks and finance have a role that technology people don’t understand; and technology firms, systems integrators and solutions providers have a role that financial people don’t understand.

Compounded to the max

In fact, I sometimes wonder if financial people understand finance and technology people understand technology. For example, a transaction banker doesn’t understand investment banking necessarily; a retail banker doesn’t understand commercial banking; a wealth manager doesn’t understand an asset manager; and a trader doesn’t understand a life assurance group pension policy sales process. Finance is a massive area of trade, not just one bucket called 'banking'.

The same is true in technology. Cloud is not one thing, but has lots of granularity that delves into hardware, infrastructure, platform, software and then applies them industry by industry in different ways. AI is not just AI, but machine learning, deep learning, basic AI, general AI and super AI, applied in different ways depending on the industry. The same with blockchain, big data, analytics and so on. Each technology area must first be defined at its granular level and then its contextual level. Again, it is not just a bucket of stuff.

It is why, when we talk about fintech, I find it amusing that tech people think they can disrupt and destroy banking – and then learn they cannot; and bank people think tech start-ups will not succeed – and then they do. Often, it is because the start-ups hire bank people to work with them, to fine-tune the tech so that it will work, and ultimately succeed because tech start-ups realise that banking is done the way it is for a reason. Often that reason is regulation, but it is more than this: it is knowledge and experience.

Room for optimism

And this is where there is hope.

Historically, the two groups – business and technology – were segregated because they didn’t understand each other. Today, thanks to agile methodology and such like, they are coming much closer together as teams. Business people are now working alongside their technology counterparts side by side, day by day. Hopefully, this means the two great areas of misunderstanding can be overcome and they can start to understand each other.

Technology visionaries work with financial people and financial people work with technology visionaries. It is proving to be a game changer. Except we then throw in quantum computing… Darn it. Back to square one.

Chris Skinner is an independent financial commentator and chairman of the London-based Financial Services Club.

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