Why Bankers Should Care what Microsoft is Buying & Bank Technology

There are events in our life that we recall exactly where we were when they took place. They are those iconic events by which we are defined as a people—for example, when man first landed on the Moon, the horrific attacks of 9/11, or when you first find out you are going to be a parent. I don’t think that June 5, 2018 will go down as one of those days for all of humanity, but for anyone dealing in technology it should a defining moment—for it is the day that our old technology died. In a $7.5 billion stock trade, Microsoft (MSFT) acquired GitHub, a popular code collaboration site. This is huge, and it will change the way banks have to look at cloud computing, FinTech competitors, and technology in general. Here are my three reasons why you as a bank technology professional should care:

1. The Forecast is Nothing But Blue Skies for Cloud Computing

The GitHub acquisition, along with moves earlier this year by Microsoft, are indicators that the software giant is doubling down on its Azure cloud computing business and focusing less and less on Windows and its traditional software business. With the open-source nature of GitHub, bankers will soon have access to solutions that have come about from open-source development and will change the structure of every bank’s IT department.

2. Your Competitor Is Now Your Business Partner

If you had asked any top-level executive at Microsoft several years ago if they would ever partner with an open-source solution, the answer would have clearly been “No.” In fact, the former CEO of Microsoft, Steve Ballmer, referred to Linux (the open-source operating system) as a cancer on the technology world. Fast forward to the present day, and Microsoft is now exchanging its precious stock to purchase its former enemy. The same is true as we look around the banking platform environment and see alternative lenders, payment providers, etc. all rapidly becoming business partners with traditional banks.

3. Collaboration and Openness Are the New Normal

This is more of a cultural issue, and it may the biggest challenge for banks. Simply put, banks need to stop acting like and thinking like a bank. As the lending team works with the IT teams, and the IT teams work with the college kids down the street on a business incubator event, ideas are more fluid and the ideation and resolutions to problems are more dynamic and impactful. There are some financial institutions that are leading the way to the new normal: U.S. Bancorp by creating an organization to support innovation, BMO Harris Bank’s sponsoring of innovation incubators, and Berkshire Bank for creating and branding itself as the most exciting bank in the market.

So while maybe not a big event like the Moon landing, or something equally memorable, don’t forget June 5, 2018 and how what Microsoft did that day took the way we looked at technology and turned everything upside down.

Topics: industry trends