New | Standard Chartered recognises risk in financial technology firms
Lender sets high bar for fintechs looking to team up with banks
Standard Chartered’s chief innovation officer has some tough love for financial technology firms.
Many of the hottest topics that fintechs are flaunting as the next big thing simply will not cut it as core processes for the global bank, says Anju Patwardhan – not today and unlikely in the next few years.
One theme that has captured the attention of a gamut of bankers this week at Sibos, the global forum put on by the financial infrastructure organisation SWIFT, is the application of the block chain database at banks.
The block chain, the technology that underlies the cryptocurrency bitcoin, is supposedly an incorruptible system for recording transactions and proponents say it is only a matter of time before it moves into the heart of the banking industry.
Not so fast, says Patwardhan. Standard Chartered has already determined that it wants nothing to do with bitcoin, the digital currency created in 2009 that exploded in value starting in 2013. As for the block chain that everyone is talking about, the regulatory issues surrounding it could keep it out of banking for the foreseeable future.
“Not for another three to five years, if it ever becomes mainstream,” she told the South China Morning Post in an interview.
Getting picked up and integrated into the core operations of a global banks is no easy task. For a technology to be bought or licensed by Standard Chartered and integrated into its credit modelling systems, the company that provides it must have seven or more years of data from the system, and preferably data from an economic downturn, Patwardhan says.