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2:51
British banks banking on Britain is 'no bad thing'
Alex Forrest Whiting
04 March 2015 at 13:49 GMT
2:23
If Scotland votes for independence, then what?
Lea Jakobiak
02 September 2014 at 14:45 GMT
2:17
Report due out on the risky business of UK banks
Lea Jakobiak
02 September 2014 at 8:25 GMT
2:13
The shocking cost of  banks' ancient technology
Lea Jakobiak
07 April 2014 at 12:46 GMT
Video / 07 April 2014 at 12:46 GMT

The shocking cost of  banks' ancient technology

Lea 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 He's observed the industry’s attempt to salvage out-of-date technology over the years due to a lack of incentive for improvement.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.

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