people are used to crappy software though and in enterprise world software regularly gets scrapped as it becomes unmaintainable.
internal quality is not important at all as it can't be put on a spreadsheet whereas cost can
In the enterprise world, isn't the problem that unmaintainable software doesn't get scrapped, because it's so embedded at the core of the organisation, and maintenance snowballs. I'm thinking of sprawling ERP systems and 'core' Banking in particular.
Quality can be put on a spreadsheet: Cost of maintenance, regulatory cost, transition cost. However, a lack of commitment to radical change exists due to lacking risk appetite.
For example, 'Challenger' banks in the EU with only a few million in VC funding and a couple of handfuls of developers are able to provide complete banking services and really good (instant response) customer service. The equivalent system in a F500 bank can cost hundred of millions of dollars and simply applies a band-aid as another layer on decrepit systems, which still get supported.
As another example [1], a poster shared on HN a couple of days ago that Tencent have 6000 developers supporting QQ, yet WeChat has only 50. All in the same company but silo'd and very different management philosophies for overlapping apps. I find that amazing but completely understand.
'Innovation' is the fashionable enterprise-level replacement buzzword for 'creativity'. The Enterprise-world has lost it's risk appetite, and is slowly being erased.
> For example, 'Challenger' banks in the EU with only a few million in VC funding and a couple of handfuls of developers are able to provide complete banking services and really good (instant response) customer service. The equivalent system in a F500 bank can cost hundred of millions of dollars and simply applies a band-aid as another layer on decrepit systems, which still get supported.
Aren't they able to do this simply because they piggyback off existing financial infrastructure, limit their scope, and eschew doing anything at all in the meatspace? Some of the complexity of real banks come from having a great many branch offices[0], handling ATMs, currencies, credits, all sizes of customers (from individuals to corporations), and running some of the backend financial services themselves.
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[0] - or whatever you call the place you physically go to do your banking; not sure about the correct term.
[0] Indeed, 'branch' is the correct term. For retail business 'branch' is the bricks and mortar space you see on a high streets for retail customers including SMEs, and for institutional 'branch' is usually head office of the country (but the only thing that matters is the relationship manager that looks after individual customers for institutional customers, the handling of business done in a shared service centre somewhere offshore).
Challenger banks, that don't have branches (well, they do in the regulatory sense, but not in the customer service sense) all seem to use MasterCard (please correct if Visa also serve them), so I'm sure there's a deal there somewhere but I'm also sure they are required by regulators to run their own general ledger as independently licensed banks, and yes existing infrastructure (it's actually quite simple to set up an ATM network of your own using existing protocols and networks). ATM withdrawals are transaction-free for the user. A challenger to payment systems is FasterPayments providing RTGS payments at low cost, who are now expanding in Hong Kong/HKD (and perhaps more).
They (challenger banks in the EU) do have very low interest rates, but seems targeted for low balances and perhaps the business model is to take advantage of PSD2 in the future for brand and financial management, I don't know, N26 makes a big deal of travel insurance and value-added services for a monthly fee of 10-15 EUR. PSD2 destroys the traditional concept of brand of a bank simply leaving the brand of the service.
Part of my background is setting up and managing shared service centres for institutional businesses, so I'm looking somewhat from the outside in the retail space as a user, but an avid user.
Monzo, Starling Bank and Revolut all have their own backends. The latter two only outsource card processing (aka connecting to the MasterCard network).
The whole point of these banks is to not have branches (I believe that’s the word you were looking for) so it’s not that they rely on third-parties to do “meatspace” things, it’s that their whole point is not to do meatspace things (because it’s unnecessary for most customers anyway) and pass on the cost savings to the customer (that’s how they get away without charging bullshit fees for foreign card transactions or declined payments).
