Ricardo Josua, Pismo Co-Founder and CEO, delivered an impactful talk on the future of banking at Money20/20 USA in Las Vegas, USA. His presentation “The cloud changed everything – but what now?” looked at how financial institutions can use the cloud to create next-generation banking products.
“Six years ago, when we founded Pismo, we had to convince banks that the cloud was a safe environment for them, which was challenging,” says Ricardo. Now, 94% of banking executives plan to move more than 50% of their business to the cloud in the next three years. A further 95% understand the benefits. “That was a huge change in only six years.” He adds that most agree that the future is based on the cloud; the question is how they redesign systems to create new possibilities.
The Venetian’s Casanova Ballroom audience heard how legacy issues could hold back even the most innovative solutions. Ricardo used the example of NASA, which designed booster rockets based on the ability to transport them across America to shuttle launch sites. Due to the size of the railway tracks, the boosters were limited in scope and size. The size of the railway tracks is based on the width of two horses side-by-side, itself a holdover from the ancient Romans. Talk about a legacy holdover holding back the future!
Slow networks with limited data, expensive storage, and limited processing capacity are inhibitors in the modern banking industry. Ricardo says the cloud removes these limiters and provides the opportunity for enriched data. The dynamic has changed, but banks still design processes as if the width of two horses limited them.
Ricardo provided an easy example – a comparative view of a payment report inside a legacy banking app against an application powered by Pismo. The former shows only the basic payment information. The latter includes geolocation, currency details, tags, cashback opportunities and more. “Having clearer and more complete information makes my life as a bank customer much easier,” he says.
Ricardo told the audience that many things we take for granted in the industry involve batch transactions. Firms and bankers got used to collecting information slowly, even through physical mail.
Now the industry no longer needs a set date to calculate interest or credit card statements; everything is instantaneous. Every new transaction can create an account, and every further confirmation or authorisation has the potential to activate auxiliary systems in real time.
Many banks in the industry are worried about change, Ricardo added, and tool their systems based around compliance, adopting an ultra-conservative approach. This leaves them vulnerable to competition from new entrants and technology companies, who can provide much faster product release cycles. Banks can arm themselves with new technology – like Pismo – to combat this while meeting security and regulatory compliance requirements.
Ricardo concluded his presentation by telling the audience that the underlying technology in banking needs to be prepared for the next wave of innovation. He said the cloud had changed everything and would be the base upon which a whole new ecosystem of products and services would emerge.
If you attended Money20/20 USA and lost Ricardo’s speech, you can watch it on the conference’s Video Archive (log in with the same email and confirmation ID you used on the Money20/20 app).