I completely agree with you that currently most banks only pay lip-service to modern technologies, even if they throw buzz words around like crazy. Mainframes, COBOL, etc, are still the standards in many, if not most, large financial institutions.
My point is that when you actually boil down what a lot of commercial and retail banking is to it's core (I would exclude capital markets here, mostly for simplicity) then it's a technology and data problems. It's a technology problem that is surrounded by legacy systems, culture, and regulations.
Ultimately, though, I believe that those banks that can most quickly infuse themselves with modern technology and -- most importantly -- actually run themselves like technology-first institutions, will be the ones that have the most success in the future. I'm not sure any bank is currently doing that, exactly to your point about compensation.
I agree with your point on commercial and retail banking. I also agree that if banks pivot in the direction of "technology-first", they will succeed in the future. I'm a bit skeptical (perhaps I'm biased in this regard since I work for one) that they will pivot in the near future though.
I've worked with several hundred regional banks and credit unions.
One thing people forget is that there are over 14,000 banks and credit unions across the country, not including the top 10. The challenges of regional FIs is dramatically different than that of large organizations. (Note, most comments on HN are from large banking backgrounds, very few from the other 14,000).
FWIW, the two themes I have seen emerge are:
1) Regional banks outsource a lot of their technology, often times leaving them with the inability to quickly adapt.
2) The regulatory environment drives technology and has created a gun shy approach to tech.
3) Most CEOs of banks and credit unions tend to have some type of finance background as opposed to technology.
I completely agree with you that currently most banks only pay lip-service to modern technologies, even if they throw buzz words around like crazy. Mainframes, COBOL, etc, are still the standards in many, if not most, large financial institutions.
My point is that when you actually boil down what a lot of commercial and retail banking is to it's core (I would exclude capital markets here, mostly for simplicity) then it's a technology and data problems. It's a technology problem that is surrounded by legacy systems, culture, and regulations.
Ultimately, though, I believe that those banks that can most quickly infuse themselves with modern technology and -- most importantly -- actually run themselves like technology-first institutions, will be the ones that have the most success in the future. I'm not sure any bank is currently doing that, exactly to your point about compensation.