What Digital Transformation Really Means for Fintech
One of the top business buzzwords in recent years is “digital transformation,” which too often is used to describe the adoption of digital tools. But Ron Shevlin, Managing Director of Fintech Research at Cornerstone Advisors, believes it’s something much more fundamental.
In our recent discussion with Shevlin on the Fintech Growth Talk, Shevlin said that a more meaningful and description definition of digital transformation not only has to do with the digitization of all processes within a business, but also a cultural change that puts digital first and embraces the fail fast culture so prevalent in the tech industry.
That’s something that’s incredibly difficult for most banks and it’s why Shevlin thinks that the industry as a whole isn’t as far ahead as some seem to think. For example, in speaking with executives at traditional banks, Shevlin has found that migrating core applications to more modern and flexible platforms is a huge stumbling block for most banks to move towards digital transformation.
What’s more, Shevlin believes that the use of artificial intelligence (AI) is a key step towards achieving digital transformation. But effective AI requires a lot of data, and traditional banks’ core applications simply can’t provide the level of detail and amount of data needed for effective AI programs. “It’s still very early,” says Shevlin about the maturation of AI. And until that happens, Shevlin believes the industry will not be transformed.
In fact, Shevlin believes industry-wide digital transformation will only happen once Gen Xers and Millennials take over the industry. As digital natives, he argues, they bring a different perspective that Baby Boomers just don’t have no matter how much they embrace technology.
