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EvAluATing PRoCEss TECHnology 217

customised services. Entrepreneurs are also finding applications well beyond finance, and these new
technologies could transform other fields, such as humanitarian aid.’ Yet, arguably, what is more sur-
prising is that this type of process technology was not embraced faster by the financial services
industry. As one commentator put it, ‘after all money is mostly represented as an entry on a com-
puter. It can be moved rapidly from one account to another with virtually no cost’. Moreover, finance
firms as a whole spend more on IT, as a proportion of their revenues, than any other sector.
Three issues have (at the time of writing) inhibited the adoption of new fintech process tech-
nologies. And they all could apply to any ‘disruptive’ and industry-wide process technologies.
The first is the traditional structure of the industry. According to Andrew Haldane, the Bank of
England’s chief economist, the international payments system still looks like a ‘spaghetti junc-
tion’, with money passing through several hands on the way from payer to recipient. Nor is it
necessarily in the existing firm’s interests to change the system. Each year huge revenues are
earned by processing payments (around $1.7 trillion). The second reason is ‘legacy’. IT systems
in banks have grown for the most part incrementally, with updates and modifications over
the years often ‘patched’ onto existing systems until a large part of firms’ annual technology
budget is consumed by maintaining, rather than re-designing, existing systems. The third issue
is risk. Understandably, financial services firms are very much concerned with the reliability of
any new technology, and new technologies are often unproven. A good example is distributed
ledger technology (DLT) – the ‘blockchain’ technology behind the Bitcoin, the digital cur-
rency. Although many technology experts regarded a distributed ledger as being more secure
(any hacker would have to crack several sites rather than a single, central register), doubts were
expressed over the technology’s ability to cope with the hundreds of thousands of transactions
every second that the financial system needed to process.

evaluating process technology

Evaluating process technology quite literally means determining its value or worth. It
involves exploring, understanding and describing the strategic consequences of adopt-
ing alternatives. Although there can be no ‘all-purpose’ list of attributes to be evaluated,
indeed the precise nature of the attributes to be included in any evaluation should
depend on the nature of the technology itself, it is useful to consider three generic
classes of evaluation criteria (Figure 6.10):
1 The feasibility of the process technology – that is, the degree of difficulty in adopting it,
and the investment of time, effort and money that will be needed.
2 The acceptability of the process technology – that is, how much it takes a firm towards
its strategic objectives, or the return the firm gets for choosing it.
3 The vulnerability associated with the process technology – that is, the extent to which
the firm is exposed if things go wrong and the risk that is run by choosing the
technology.

evaluating feasibility

All process technology decisions have resource implications – even the decision to do
nothing liberates resources that would otherwise be used. In this context we are not just
talking about financial resources, which, although critical, are no help if, say, the tech-
nical skills necessary to design and implement a technology are not available. There-
fore, if the resources required to implement technology are greater than those that are

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