The Banking Dilemma - Business Versus Technology

Stanley Epstein
July 16, 2009 — 1,549 views  
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It never ceases to amaze me that in the world of banking two different worlds can seemingly co-exist side by side, each oblivious of the other. There are many examples of this, such as "sound risk management" versus "business imperatives". This particular issue lies, in my view, at the heart of the current financial crisis.

However, we are probably too preoccupied with financial crisis issues at the moment, so I don't want to dwell on this here. I would rather muse on another paradoxical situation which I often, as a consultant, find so very frustrating. This is the "world of technology" versus the "world of business".

By its nature modern banking is technology driven. Data processing systems have made the huge volumes of transactions that occur each day as well as the supply of the mountainous volumes of data dealing with and supporting these transactions possible. Yet the transactions in question are all driven by business imperatives, always at the behest of the customer.

While generally bankers at the "business" end can see the interdependence between technology and banking, the same is not true for "bankers" at the "technology" end. Neither is it really true for infrastructure providers, be they domestic or international, such as payment system operators, ACHs, payment processors, messaging service providers and the like.

There is another, almost self destructive aspect to this inability of one side to understand the other. This is the inability of each element (technology and business) to either understand or to apply the skills of the other to create a harmonious whole that melds the technology with the business' requirements and other needs.

By not doing things or by not doing them right how many opportunities are missed? I shudder to think.

About the Author

Stanley Epstein is a Principal Associate and Director of Citadel Advantage Ltd., a consultancy dealing in bank operations and specializing in Operations Risk and Payment Systems. Citadel Advantage provides comprehensive range of Risk Management & Payments related Training Courses for banks and other financial institutions. Further information and details can be found at

Stanley Epstein