In the current world, some banks, enterprise AI and fintech entrepreneurs have worked together to build that competitive edge for the bank over its competitors. Meanwhile, generally, it seems that most banks are not more aligned to working with enterprise AI and Fintech companies which the fintech companies think is not a good choice. However, banks are not as stupid as the enterprise AI and fintech entrepreneurs think. There is a good reason as to why banks have not been too eager to adapt to fintech’s ideas.
Fintech entrepreneurs think that banks are being stupid for not adapting the latest fintech solutions. Some fintech solutions have even launched their own challenger bank utilizing their own fintech solutions. This way, the fintech solutions can use their tech in their own bank rather than pitching them to other banks.
Why banks are not as stupid but rather smarter?
- Fintech entrepreneurs may be creators, but banks know what is good for business.
- Using the same platform as competitors does not make banks better than others
- Banks have domain expertise that technologists do not have
- It is better to build their own unique platform rather than using a platform used by all other competitor banks
Although fintech entrepreneurs may think that banks are stupid for not adapting the new and latest fintech solutions and sticking to the traditional solutions, banks are not as stupid. They know what they are doing. Fintech entrepreneurs are creators or innovators that create a solution, and banks are business handlers, and they know how business works and what is good for business.
Instead of using solutions provided by fintech entrepreneurs, they would rather build their own solutions even though it may be expensive. This is because the solution that enterprise AI and fintech entrepreneur provides are not just exclusive to the particular bank. They might have provided the same solution to multiple other banks as well. Because of this reason, the bank will not be able to get a competitive edge over other banks.
In addition, banks have domain expertise that the technologist does not have. Banks have more insights into the business and in-depth knowledge, whereas fintech entrepreneurs and innovators have less knowledge compared to them. Because of this reason, the fintech solutions may offer too much technology without offering much of the material value that it originally intended to provide.
So, banks now have started to look forward to their own solutions. It is not that they have entirely discarded the latest technological method and is entirely stuck to traditional method. They are more or less using both the methods and they do value the enterprise AI.
However, since they value the enterprise AI, they want the competitive edge over its competitors and do not want to use the same platform. Banks are not as stupid as others think. Therefore, they instead try to build their own unique enterprise AI so that they can get that competitive edge over their competitor banks.
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What are banks doing?
As it is already clear that banks are not as stupid and they do have plans and actions in place for the competitive edge. Other banks using such fintech solutions do have some good results and the banks are noticing that. Therefore, they are trying to build their own in-house enterprise AI.
The banks are hiring their own data scientists to get that insight on the data that is needed. Also, this means that they completely own the human resources and they are not shared with other banks. In addition, they also add more number of data scientists that outnumber the challenger banks. This must give the bank the upper hand.
Risks of building their own enterprise AI solution
- Loss of a huge amount of money and time
- If something goes wrong, competitors will be ahead
Although building their own enterprise AI solution is a good idea, it may not always bring good results. Also, the expense is high as compared to hiring fintech solutions. Also, as the bank spends a lot of money on this solution, they might actually miss the solution and the competitors may just go further up than them. This is one big risk while taking the decision not to adapt to enterprise AI and fintech entrepreneurs and instead develop your own solution.
So, In conclusion, banks are not as stupid as enterprise AI and fintech entrepreneurs think. Banks are not as stupid to risk their business. Instead, they are looking for better alternatives as well. Now, as the quality and need of enterprise AI and fintech entrepreneurs increases in the future, banks will be more welcoming to working with them.
What are your thoughts on this matter? Do you think banks are not as stupid or are they? Leave your comments below on the comment section.
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