I went to the Finance Day fair at KTH yesterday, to discus in what grade innovation is progressed into Swedish banks. The innovations that occur are more than often linked to software development to rise the overall user-experience for their customers.
In order to follow the conclusion of my observations I have to introduce a little bit of background information about the Swedish bank system. The system is based out of a software that was developed in the early 80s, which hasn’t really been updated since then. If this is the first time that you hear about this, the reaction might be: “huh – that sounds bizarre”, but think about how “perfect” the system has to be. For all transactions that is done on a daily basis, every day, it cannot be paused – it has a life of its own. Which means that you never get the time to change system and move over files and such. So the way that the Swedish bank system has followed the technical development (as everything, that still exists on the market is bound to do) is to innovate “plugin-program” that is docked on to the system.
So back over to the conclusion, since the banks is bound to follow a progressive development of their software to keep up with competition. Software will forever dock on to the gigantic system creating a even bigger lock-in effect. When will the innovation (with capital I) that will bring us a paradigm shift in the Swedish bank market?
