In banking, code is now cheap. Distribution and customer relationships are the scarce assets. That was the thread through a great panel on “AI in Banking” here in Graz, invited by Elevator Ventures and Raiffeisen-Landesbank Steiermark. My five takeaways:
1) Startups have an “unfair” competitive advantage right now, as many large banks have not been able to benefit from the new speed in tech development and the roll-out of AI tools is slow.
2) The biggest change of AI in banking comes from the iteration speed. This puts large traditional banks at a disadvantage, as the technology is now often ready faster than the organisation around it. In banks, long internal alignment used to run in parallel with the IT build. Now the build finishes first, and alignment and process implementation are the bottleneck.
3) SaaS is not dead, especially not in regulated industries like banking. Banks will certainly build more tools internally, but a huge value of SaaS emerges in any tool where knowledge sharing between institutions (e.g. fraud prevention or AML) adds enormous value to banks. The real differentiation between SaaS providers is understanding how a specific bank actually works internally and integrating into its existing tech stack.
4) Talent and ideas now emerge from everywhere. The Bay Area remains unrivalled for capital and inspiration, but some of the best talent now sits in emerging markets and in Europe. Eastern Europe in particular will play a major role in the next wave of innovation. The best thing European regulators can do for these local champions is get out of their way. That includes accelerating the full roll-out of EU-Inc.
5) Collaboration between banks and startups can create the best of both worlds. For banks, it is cheaper and faster than building internally. For startups, it is a faster path to large-scale impact. It only works if procurement allows safe sandbox environments. If procurement takes longer than the pilot would run, the speed advantage is gone.
Thank you for the invitation, Raiffeisen Bank International AG!
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Fun fact: The actual title of the panel according to our moderator was “AI won’t kill your company - COMPLACENCY will”. The slide behind us says otherwise. But maybe both is true?
#AI #Fintech #Banking #Innovation #Europe