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Ameya

22 Aug, 17 tweets, 5 min read

A thread of now tech is changing gears in banking & financial domain.

The banking is undergoing a tremendous change with the adoption of the technology. The business that's mainly run by legacy systems is now digitally transforming.

However, there is a catch. There are companies that offer digital transformation solutions to the legacy systems. Companies such as #IntellectDesign

Then there are digitally native banks such as #Kakaobank that's fully digital since inception.

In fact, #kakaobank was build based on "technology to process" approach. While traditional banks struggle with "process to technology".

Companies such as nCino & Mambu are giving tough fight to traditional product companies such as #intellectdesign & #Temenos, eating a lot of market share from them.

There is a revolution that's silently brewing behind all this:

1. Transition of legacy to digital banking
2. Rise of digitally native banks
3. Rise of startup cultured companies such as nCino & Mambu that are defying traditional product R&D & monetization processes.

However, there is a 4th aspect too. And that's Indian Bank's Blockchain infrastructure Co. Pvt. Ltd aka IBBIC.

IBBIC's promoters are 10 legacy banks RBL, ICICI, HDFC, Kotak, Axis, Indus, Yes, SIB, Federal, IDFC First, SBI, BoB, IB, Canara, StanChart

While social media is upbeat about #infosys & the downtime of Income Tax portal, IBBIC will use Finacle to launch initial settlements for LCs

IBBIC is building this platform on only one basis - the decentralization of the trust in the process of settling a transaction.

This is an attempt to eliminate fraud, duplicity, reuse of already settled transactions by legacy banks.

The platform will be launched around 2022 & will be completely driven by blockchain & open for all other banks & financial institutions who can join the network as one of the validators.

Decentralization & Distributed governance to get rid of misbehavior or a fraud is the fundamental basis for blockchain adoption.

China's BCTrade - an #Ethereum based blockchain platform already settles txns worth $50bn.

ECB is settling bonds worth 100mn Euros. Korea is running a pilot of its CBDC on #Ethereum.

What we need is companies that offer digital solutions to traditional banking to also be open about the new technology & settlement process.

While many - #intellectdesign #newgen #LTI have solutions for legacy banking to transform digitally, what is missing is a perspective on when or how these companies will start investing in blockchain based pilot projects.

#IntellectDesign said in its last concall that they are not doing anything in this domain. Neither is Newgen. LTI has a blockchain platform & also payments solution that's operational in NORDIC already.

#TCS & #Infosys are also developing capabilities rapidly in this domain.

The key is to start because the journey from pilot to product is very long & technologically treacherous. The early you start, the better chance you have to stay relevant.

Otherwise, there are consortiums like IBBIC that will ensure that next age tech solutions are launched by banks for banks. It ain't a win win game anymore for tech companies then.

If I missed something on product/solution, pl do share so we all learn. This isn't about stock names, it is about the domain & the tech. So pl keep that in mind before discussing on stocks individually. This thread is only a broader view on business & tech. Nothing more.

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