The shocking cost of banks' ancient technologyLea Jakobiak
Ageing banking technology is costing the British economy billions of pounds a year, according to Financial Technology Expert and Chairman of Madiston LendLoanInvest, Tim Simon. He's observed the industry’s attempt to salvage out-of-date technology over the years due to a lack of incentive for improvement. Some of the legacy systems active in banks today are over 30 years old according to Simon. An example of this is the Bacs system, which is used by in retail banks. A telephone version was launched in 1983 and he says the basics of the system is still in use today. Newer technology, however, is starting to change the payment systems process and big banks may have problems in catching up.
These new tools are challenging the lengthy, costly, and complicated traditional systems of the past. One method in particular, peer-to-peer lending has already begun to attract a significant amount of attention. P2P lending is estimated to be 60 percent more efficient than the current systems in place, because it removes any intermediaries from the transaction. Overall, the market for newer banking systems is estimated to have tremendous profitability and growth in the coming decade.