Technology is not the biggest threat to the bank

In this article I want to express my opinion on why I disagree with title that technology is threat to the bank of Antony Jenkins.

First of all, I'd like to point that anything that is new, can poses a threat to something, that already exists on the market. And task of those which exist is either to use it, or they will be forced to close themselves.

First subheading of Antony is job losses of bank workers. I definitely agree that job losses of bank workers will happen. And absolutely agree that job losses will happen because of improvement of data collecting, AI process data faster etc. But I disagree that such a think poses any threat to bank. I can say even opposite, such job loss gives a big win to bank. But only to those, that will use technologies properly.

Let's compare two banks: Bank A and Bank B. And let's assume that both of them started in the same day, had the same number of workers, the same number of departments, work in the same city and even their departments were located near each other. That is for the sake of comparison.

Time goes by, and Bank A and Bank B notice that there is increasing number of people that visit bank department. That makes banks happy ( more customers makes everybody happy ). What as usually those people want to do? They want to put cash on their bank account. Bank A opens 10 cash registration points which operated by humans, and hires 10 people. Bank B installs 10 registration points ATM, and hire one technician for those machines and three persons that take money from those machines. Also Bank B trains his existing personnel how nicely to explain to customers how to put money on their bank account through cash register machine. Machine of Bank B works 24 hours. Cash registrations of Bank A works 8 hours. How do you think, which bank will get more active customers? Bank B.With flow of time, what will be cheaper, to pay to 10 people at cash registration or to pay to 1 person that makes cash machine works + 3 other people that regularly take cash from cash machines? Next question, which approach is easier to scale? As outcome, Bank B will be able to have it's departments almost in every supermarket, and Bank A will be limited only by it's departments. But what was real threat for Bank A? technology or inability of using technology of Bank A?

Flow of time continues, people become more and more used with technologies. More and more people would like to get loan from banks but as it often happens, they not always have a time to visit department of bank to take there loan. Bank B noticed it, and made special promotion to it's customer: apply for loan on-line. All you need to do, is register at web site, and ask for loan. Depending from the size of loan automated system either will approve your loan, or ask for additional verification. How do you think, which bank will have more customers? And again question, what was real threat, technology or inability of using technology?

As you understand in few years Bank A had to increase it's number of departments in order to serve their customers, Bank B decreased it's number of departments but increased number of cash registration machines. And as outcome, Bank B increased it's income, and Bank A decreased it's income. But why that happen? Because of technology or because of inability to use technology?

I can continue this list on and on. For example blockchain technologies. Basic idea of blockchain is creation of blocks about transactions, validation of those blocks via some algorithm and chaining them. As simple as that. Will some bank use it? Do they have resources for using them?


As a summary I want to say one thing: the technology in itself is not a threat to any bank. But inability to use technology, that is the real threat to bank. Actually inability to use new technology is a threat to any business not only bank.

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