To keep up with the innovation of fintech companies, the banking industry will need to take a different approach to building new technologies, according to Sheila Patel, a former head of asset management at Goldman Sachs.
Intensifying competition with start-up companies Increased spending Patel told the Financial Times that top US banks are better off buying or partnering with tech companies than focusing on making things in-house.
“Think tanks and incubators can work, but the best ideas can come from outside the environment,” she said. “Financial institutions of all sizes, especially large ones, are behaving that way anyway, so we need to find a way to innovate outside the wall.”
Patel, 52, announced in December that he had retired from his role as chairman of Goldman Sachs’ $ 2 trillion wealth management division after working in the banking industry for 30 years. After engaging in business in various leading positions in Europe and Asia, Patel made a name for himself by making long-term bets on emerging markets that others considered too risky, fortune’s banking industry. Selected as one of the most powerful women in Europe.
This month she will join B Capital, a venture capital firm backed by the Boston Consulting Group. The company is funding technology companies aimed at modernizing traditional manual and bureaucratic industries, such as banks renowned for their nasty legacy technology systems.
“We spend a lot of time talking about physical infrastructure. People who fly to US airports or drive on the road think they have something to do, but for business. We also need to invest in our digital infrastructure, “she says. ..
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Raj Ganguly, one of the co-founders of B Capital, said most of the innovations in the financial industry took place outside the United States. In general, the company divides its $ 3.5 billion capital equally into the United States and abroad, but in the finance sector, about 80% of its investment is abroad, primarily in Asia.
“American fintech entrepreneurs basically build things on top of existing really good rails,” Gangley said. “Fintech entrepreneurs in India and Indonesia are building everything.”
Patel said the challenge of financial innovation is reflected in B Capital’s other priority area, healthcare.
“How would you have consulted your doctor without some telemedicine technology? How could you know what to do about your treatment policy?” She said. “There are many things that can be done more efficiently.”
Ex-Goldman executive: US banks need new approach to technology Source link Ex-Goldman executive: US banks need new approach to technology