Ex-Goldman executive: US banks need a new take on tech

To keep up with the innovation of fintech companies, the banking industry will need to take a different approach to developing new technologies, according to Sheila Patel, former head of asset management at Goldman Sachs.

Intensified competition with start-ups Increase in expenses Patel told the Financial Times that major U.S. banks are better off buying or partnering with tech companies rather than focusing on in-house manufacturing.

“Think tanks and incubators can work, but the best ideas can come from outside the environment,” she said. “Financial institutions of all sizes, especially large ones, behave this way anyway, so we have to find a way to innovate outside the walls.”

Patel, 52, announced in December that he had retired from his post as chairman of Goldman Sachs’ $ 2 trillion wealth management division after working in banking for 30 years. After engaging in business in various management positions in Europe and Asia, Patel made a name for himself by making long-term bets in emerging markets that others considered too risky, the banking sector of the wealth. Selected as one of the most powerful women in Europe.

This month, she will join B Capital, a venture capital firm backed by the Boston Consulting Group. The company funds tech companies aimed at modernizing traditional manual and bureaucratic industries, such as banks notorious for their nasty legacy tech systems.

“We spend a lot of time talking about physical infrastructure. People who fly to US airports or drive on the highway think they have something to do but for business. We also need to invest in our digital infrastructure, ”she said. ..

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Raj Ganguly, one of the co-founders of B Capital, said most innovations in the financial sector have taken place outside of the United States. Typically, the company splits its $ 3.5 billion capital equally between the United States and overseas, but in the financial sector, around 80% of its investment is overseas, mostly in Asia.

“American fintech entrepreneurs are basically building things on very good existing rails,” Gangley said. “Fintech entrepreneurs in India and Indonesia are building everything. “

Patel said the challenge of financial innovation is reflected in B Capital’s other priority area, healthcare.

“How would you have consulted your doctor without telemedicine technology?” How would you know what to do with your treatment policy? ” She said. “There are a lot of things that can be done more efficiently. “

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