Being unreasonable

David Edelman suggests being unreasonable – not traditionally taken as a compliment – is an absolute must for successful digital delivery.

It’s part of how to transform your enterprise to become authentically digital.

An unreasonable aspiration is like a key that unlocks new ways of thinking about things. It jumpstarts new conversations, often between people who haven’t spoken before. When nurtured and supported by active leadership, it catalyzes action. And before long, aspirations that at first seemed unreasonable are actually quite doable.

Rear Admiral Grace Hopper described humans as “allergic to change” – naturally neophobic.

We've always done it this way

Innovations often fail to find a welcome home in large organisations because the existing management cadre either don’t recognise the inherent potential value or can’t face changing to embrace it.

Complacency is always a great threat, but in apparently successful incumbents the peril is often not immediately obvious to the decision makers. (“The chasm of doom” as I describe it.)

When faced with a new idea to successfully evolve their existing business, executives can all too easily dismiss it with a shrug of their shoulders and return to the relative safety of what they’ve always done.

If tolerance for this type of complacency comes from board level, it will define the enterprise mindset.

Even in those organisations that genuinely want to adapt, is there sufficient confidence in their existing teams to deliver such transformation?

Many incumbents believe they already operate at full capacity with their existing remediation and transformation programmes. They have found the relentless waves of regulatory compliance exhausting and have lost many of their most effective change agents.

The very people needed to design and execute successful digital change have quit the bank for organisations with entirely different cultures, or have set up on their own. Tired of the apparent refusal of ‘Management’ to move meaningfully forward with ‘Digital’, they are attracted by more fertile and less fettered pastures.

To effect real digital transformation, companies should quickly move far beyond experimentation. The digital mindset and capabilities must become hard-wired into the entire business. New skills must be acquired and new partnerships forged. Courage must be found to make the tough, painful decisions today.

As long as the CEO considers ‘Digital’ an experiment – a mere bolt-on to the existing business – the digital transformation will fail.

When the enterprise embraces the digital agenda as a core way of doing business, the transformation can succeed.

Unlocking value by becoming authentically digital – enabling client outcomes through sustainable partnerships.

That’s far from unreasonable.

Just let me drive

When I left university, I financed my move to London by selling my car. Though long before collaborative consumption was enabled – no ZipCar, City Car Club and definitely no Uber – getting around London was pretty easy. I soon landed a job in the City which was well served by public transport.

For a few years, the choice to not have a car was a no brainer.  Even if you could afford the car, the insurance, fuel and servicing, you still needed to find somewhere to park. In central London, this was infuriating and expensive.

After a few years of Zone 1, I moved to the suburbs and needed a car even more than I wanted one. Buying one second hand from one of my team made payment easy, insurance straightforward to arrange, my apartment had a parking space and a barrel of oil was $12.

Having the car was liberating but also made me hunger for something better. A lot better. I upgraded. And then I upgraded again. And again and again. I kept buying cars and though I kept changing dealers, there was one thing consistent about the experience. The dealer would never let me drive away with the car the same day.
Things have moved on a bit these days, but the experience is broadly the same.

As we adapt our financial services to a digital future, it’s vital that we enable the customer outcome digitally. It’s not enough to simply digitise the existing analogue workflow.

Much as customers don’t want a mortgage, they want somewhere to live, customers want to drive a car. They don’t desire a car loan and an insurance policy and a servicing schedule.

So in this FinTech era, why is it not yet possible to visit a car dealer and:

  • point phone camera at number plate of car;
  • check finance history of the car;
  • compare prices of equivalent vehicles in vicinity;
  • get an all-in quote for finance, insurance and servicing;
  • agree purchase of vehicle;
  • make payment;
  • pay road tax;
  • drive away.
All without having to put down the phone or pick up a pen.

Lloyds Banking Group just announced ‘Halifax Car Plan Extra’ – internet banking customers can pre-arrange financing for cars and transfer the funds to the dealer.

This should take out some of the friction from the process flow I sketch out above.

All the other modules to enable this workflow exist today.

However, they’re entirely fragmented.

Around 5 years ago, I recall a Google exec came to our HQ where we were hosting a mobile payments workshop.

Two things stood out:

  • here was the only person I’d seen able to pull off a Prezi;
  • mobile searches for “HSBC car insurance” had risen 580%.
Though we didn’t know what the base was, we now knew (as did Barclays who were also present) that there were growing numbers of customers out there on dealer forecourts trying to buy a car and drive it away – with our help.

Here were people actually trying to give us their money and at the time we didn’t even have a mobile-optimised website.

Will Uber soon have changed the landscape so much that this window of opportunity will no longer be open?

Or in the next 5 more years will someone put the workflow together and just let me drive?

Dinosaurs, digiphiles and dynamite

This started as a ‘brief’ comment on Chris Skinner’s excellent post about a Kodak/Nokia moment in banking.
It’s much more important you go read his post, than mine below.

Obviously the status quo is unsustainable – it’s just a question of what time horizon one uses to assess the urgency/pace of change.

In time, financial historians will surely look back at this period and the current wave of FinTech activity as the point any [by then] defunct incumbent should have identified as their own Kodak/Nokia moment.

Using existing metrics, it’s tough to accurately assess the capability of the incumbent banks to adapt to thrive in the new financial landscape.

Too little attention is being paid to the day after tomorrow as so much of their effort (and mindset) is focussed on issues from their past.

It’s tough for banks to manage to their present metrics whilst also adapting to an uncertain future. Indeed, it requires such courage to turn away from (relatively) lucrative business today to secure worthwhile business tomorrow, that many simply will not do it.

And, oil tanker metaphors aside, this brings us to the most critical part of Barabba’s portion of the Kodak/Nokia post;

Having an enterprise mindset that is open to change. Unless those at the top are sufficiently open and willing to consider all options, the decision-making process soon gets distorted.

Consider all options.

Even if that means actively destroying value today – seizing control of the agenda and securing a new future.

So who’s right? The digital banker or the decision-making executive team?

Today, I think both are. I truly believe there is still huge value in bringing the three camps closer together.

Yes, three.

  • digiphiles – the bankers you witness talking the right game, but trapped executing a digital strategy with limited senior management access;
  • dinosaurs – the diligent incumbent leaders who – to outside observers – appear yet to feel their platform burning; and
  • dynamite – the FinTech playmakers – those who are just out there, getting it done.

Many of you maybe believe this is already happening. There is now a huge industry around the industry of FinTech – the accelerators, events, trade missions. And there’s certainly no shortage of column inches, conferences or consultants.

But you don’t create an enterprise mindset with activity only outside the organisation.

Whilst the board level agenda does now feature FinTech regularly, I wonder if it’s yet in the right context.
‘FinTech’ shouldn’t be a distinct label applied to incremental activity. Something optional that can easily be ‘bolted on’ to the existing organisation.
No, that doesn’t require tough decisions to be made today.
Instead, if true value is to be unlocked, FinTech must be embraced by incumbent banks throughout their entire organisation – old and new, top to bottom.

It must become a core part of their survival strategy and blended into their DNA.

If that happens and the fourth camp – surely the most important of all – the customer – can be invited to participate in defining the future, well, that’s a story I’d like my grandchildren to read in their history studies.

How banks can adapt to an uncertain digital future

Boards of many global financial services firms now identify the need to adapt business models and strategies to survive changes to customer behaviour and market structure.

Yet, even as they actively seek solutions, some struggle to balance the required change with their incumbent business.
Their existing businesses seem to perform adequately on both an absolute and relative basis; regulatory remediation is all-consuming and the true nature of the challenge from new entrants remains disturbingly unclear.

In these environments, digital transformation can too easily remain an incremental activity – an optional, experimental idiosyncracy.
When will “Mobile banking” become just “banking”?
Boards should commit significant time themselves to explore these fundamental changes to their markets, customers and competitors.
They must do this to develop sufficient confidence in their strategic vision and to accurately assess the delivery capability of their teams.

Can an organisation which delivered many decades of growth in times of relative stability be adapted to a wildly uncertain, digital present?
To adapt the corporate mindset to prepare for a successful, sustainable future, many areas need to be thoroughly explored and choices made – many of which may not be obviously considered part of a traditional digital/IT agenda.

For example:

  • What exactly is the nature of a successful FS brand in the future?
    What precisely will customers value (and reward) from a bank?
    What could – and should – be commoditised in consortia and what must be retained by individual FS brands as sources of differentiation and value creation?
  • For a ‘customer-led’ business strategy to be authentic, how best to adapt to an uncertain future where digital drives customer expectations to evolve faster than traditional models can adapt.
  • How to embrace (rather than resist) changes in customer expectations.  To develop scalable platforms to encourage diverse customers to engage with the brand in their preferred manner – rather than the way the bank mandates.
  • How should performance management models be upgraded for a new normal where adaptability and future execution capability are no longer accurately indicated by past performance.
  • What is the optimal model for managing programmes of innovation – specifically the engagement with incumbent business teams – to optimise returns.
  • How best to move digital beyond a mere marketing façade – closing gap between marketing promise and proof.
  • How to neutralise the catastrophic effect on change of an intractable organisational culture combined with poor strategic communications.
  • How to change the tone of approach to regulatory compliance to consider it a real commercial opportunity, rather than a burden which absorbs most change capacity.
These are fundamental issues which should not be ignored.

I’ve spoken recently about why I’m optimistic for the incumbents as much as I am excited about new entrants and FinTech players.

Incumbent organisations remain stocked with talent, experience and energy. To adapt these to a digital future, the Board needs an action plan.

An action plan to change the mindset, time horizon, motivations, culture and rewards to get most out of these assets could fit under a ‘Digital Transformation’ umbrella.

But I believe it’s plainer than that.
Less transient, more sustainable.
It’s simply ‘business’ – ‘the business of banking’.

Fruitfully friction free finance

The cost to me of doing business with you should be zero.

My business has value for you. Capturing that value is your business.

Don’t make me work to give you my money.

I won’t be bedazzled by your flashy front end – however challenging it was for you to design and deploy.

I want only for you to remove the friction from me using your services to achieve my objectives.

Provide that framework – make it usable, reliable and secure – and we may be partners for life.

If you force me to work in a particular way – a way which suits your organisational structure rather than mine – I will actively seek alternatives.

Match your purpose to mine – help me achieve my goals. That’s how to create a sustainable business. Fruitfully free of friction.


Are boards fishing for digital talent in shallow pools?


In pursuit of strategies to survive the relentless digitisation of financial services, are the pools in which boards fish for talent too shallow?
Major financial institutions began to truly grasp the magnitude of change required years after the iPad was introduced. Awareness comes not through regulatory mandate, but from customer behaviour and expectations which now evolve uncomfortably swiftly. Successful adaptation to this unpredictable environment requires a new mindset, new partners and new tactics. The mindset is now relatively easy to obtain. Finding the right people and partners is a conundrum.


The levels of activity, innovation and investment around FinTech indicate the value at stake. All participants – established and emerging – face huge challenges and opportunity. The incumbents must continue to manage their existing businesses whilst preparing (for) the future model. The challengers must achieve scale whilst maintaining security and trust.


The future is now a moving target. Digital introduces too many variables for existing strategic models to manage. With consumer behaviour and expectations evolving at such a pace, a target state is hard to define beyond a few fundamentals.

In the absence of clearly defined goals to aim for, existing strategy and delivery regimes may struggle to adapt and perform effectively.
The very organisational structures, partnerships and cultures which emerged successfully through years of oligopolistic stability prove entirely unsuitable in today’s dynamic environment.

Larger financial institutions still derive too much comfort from their ability thus far to withstand attacks on multiple fronts – the increased cost of regulatory compliance, the arrival of numerous, diverse challengers. This apparent success is temporary. Survival to date is a function of  scale – with today’s performance being reviewed through yesterday’s lens.

Historically acceptable measures of success – market share, revenue/FTE, RoRWA – cannot reliably predict the incumbents’ ability to adapt.

The huge infrastructure created and maintained by the large banks and payments providers should – in theory – be of significant advantage. The sheer complexity of the financial system once provided an almost insurmountable barrier to entry. Now, however, ongoing maintenance of the existing infrastructure is now impossibly expensive. Regulatory compliance absorbs most – if not all – available discretionary investment. Capacity which could otherwise be deployed to adapt the infrastructure to a new digital future.

The once advantageous barrier to entry now acts as an inflexible barrier to change for the incumbent.


We face an uncertain future with technology enabling global changes with astonishing impact. The rise of the collaborative economy, the shift away from physical-first to digital-only. Changes in the meaning of work, the role of education. Evolution of the shape of a career, the nature of retirement. Society is expecting – and digital is enabling – an entirely different future from the one the current financial systems can support.

A strategy that hopes to largely protect the status quo with mere incremental digitisation of balance sheet/customer relationship will fail.

Instead, the very nature of the relationship between institution and marketplace needs reconsideration.

“We need banking, we don’t need banks.” was said some time ago, but the definition of what ‘banking’ will even be remains an ill-defined target.

A viable strategy for an unforeseeable future is one which enables multiple possibilities.

Responsible participation in the global financial system requires providers defend the core fundamentals of security and stability.

Historically successful incumbents have long-embedded those principles into their organisational DNA and built ludicrously complex infrastructures to milk value from the system. But future success requires something fundamentally different – a new layer – transparent and free of friction – which adds value to the end user. An authentic, digitally-enabling proposition which adapts with customers to support their evolving goals on their terms.


As I mentioned in this recent post, I believe the momentum around ‘FinTech’ has already had an immeasurably positive impact by changing the nature and velocity of strategic discussions inside incumbents.

It’s worthwhile considering exactly what “FinTech” means:

“That new world is supporting, displacing and disintermediating the old world finance with technology.  It is recreating the world of finance with technology.  It is creating a 21st century world of finance based upon technology.  That to me is fintech.”  - Chris Skinner

New entrants like TransferWise and The Currency Cloud continue to raise the (unbundled) bar for how customer experience should be defined.

Simple, Moven, Fidor and others continue to provide living case studies on the merits of an entirely customer-centric approach to delivering finance.

The ongoing fascination with Bitcoin and blockchain technologies is reshaping  agendas inside institutions and with their regulators and stakeholders.


If you work in an incumbent – particularly as an enabler/partner – it can be uncomfortable to admit your own strategy or business relationship needs improvement. Over many years, you have crafted a reputation for reliable delivery. But the context has been changed radically by the end user and your stakeholders now deserve something more. It’s time to find new partners, new viewpoints, new tactics.

But if it’s true there are now enough influencers at some of the incumbents with the right mindset to truly begin to adapt, do they have the right teams and partners?

The boards of the major incumbents have started asking some of the right questions. They’ve exhausted internal searches and now look outside for digital solutions. Yet the briefs they are giving the search firms may be too narrow. I understand from the biggest firms that boards are still seeking lower-risk, lateral hires – people who already carry these business cards elsewhere.

  • The retail ‘Digital lead’ at a large UK clearer has apparently himself interviewed over 500 candidates in pursuit of the ‘right’ digital change agents;
  • A major payments provider searches for digital payments specialists with specific cards and payments experience. However their non-solicitation agreement with their leading competitors essentially dehydrates an already shallow pool in which the search firms can fish.

The FinTech community can obviously provide a natural source of talent and partnership. This can benefit challengers and incumbents alike. Rather than pursuing pure disintermediation, challengers may achieve scale faster and greater impact if they work with rather than strictly against the incumbents.

The accelerators – and particularly their mentor communities – can also act as mediators and translators – identifying commercially viable ways to share the practical benefits of the FinTech revolution back into the latent infrastructure (and vice versa).

But this type of partnership approach requires fundamental change inside and throughout the incumbents – it will be fascinating to see which ones adapt.


I believe the successful teams of today need a wide range of capabilities – in a combination not often seen in finance.

  • Commerciality
  • Technical capability
  • Data savviness
  • Design
  • Curiosity
  • Vision
  • Adaptability
  • Resilience
  • Humility
  • Empathy

In a forthcoming post I’ll expand on each of these and why I think they’re critical. Obviously there are many more and I’d appreciate comments on any I’ve missed.

There is much cause for optimism in the FS industry for providers and consumers. But until we consider parallel industries and build multi-disciplinary teams filled with passion and hope, the pools in which we fish in may prove too shallow.


Photo credit 

FinTech glass half full; change story barely half written.

A tweet grabbed my attention the other day:

In FinTech, Andy McLean is one of those guys who is just getting out there and changing things. Proactivity like this always needs to be respected and the ideas raised in his tweet were interesting. 

Another FinTech veteran – Brad van Leeuwen – later picked up the same point and endorsed it.

The idea resonated with me not least because I’ve worked at two very large and complex financial incumbents. Whilst there, I found myself seduced by the idea of drawing a line under the existing model and starting afresh. I wasn’t alone – perhaps it’s a natural reaction for all frustrated change agents who have insufficient confidence in their organisation’s capability to adapt.

But in addition to spending more time with FinTech challengers I’ve also recently met with enough incumbents who seem desperately willing to adapt to the future. I feel the past few years of FinTech activity has raised awareness of the need for change at a senior level. We may indeed have passed a tipping point and I believe more hope than ever may yet lie inside the existing industry.

For people like me who are unwilling (or unable) to give up entirely on the old world, there may be almost as much cause for excitement as there is about the new FinTech and digital-only ventures.

I tweeted as much.

My point was that, whilst I agree it’s certainly difficult to change the incumbent position, it’s not something we can collectively afford to overlook. Whilst I truly believe we need to splice new thinking, skills and execution capabilities into the incumbents, I can’t subscribe to the model where everyone needs to be tossed out.

Change is difficult and Brad asked the most important question: 

To introduce change, you need to have – and share – a clear vision for people to get behind. You must identify and convert the sceptics – quickly and convincingly.

At many incumbents, you’ll easily find a rich seam of people who have never worked anywhere else. These people are institutionally conditioned to a particular way of doing things. They have decades of experience – collectively they have centuries of corporate muscle memory and organisational scar tissue. To work with these people to help change such long-held beliefs is a significant undertaking.

A few years back, employee engagement surveys seemed to be everywhere. They’re still in favour at many organisations who subscribe to the principle of engaged teams being more productive.

Whenever I would review employee engagement reports, I was most frustrated by the middle (amber) section – the one which separated the fully engaged (green) employees from apparently fully disengaged (red) ones. This is where you find the coasters. They hide in plain sight, sharing their evident frustration with everything, yet unable to offer tangible suggestions about what could be changed. Many managers gladly celebrate increasing green scores and panic about red – ignoring entirely the amber zone which could well be widening in front of their eyes.

I’ve always looked at this differently. Reds don’t hold back when they’re taking the surveys. They have specific issues and they know what they are. They’re searching for someone who will listen. As a manager, this is a great position to be in,  because armed with the knowledge of what’s wrong you can actively do something about it. (You may choose not to, but at least it was a conscious decision.)

If you address the tangible concerns of the reds, they can quickly convert to being the brightest green. From disengaged to fully engaged – skipping straight past amber. They’re often influential and naturally loyal to the brand. By addressing their issues, you’ve created ardent advocates of your strategy and supporters of your leadership. They appreciate that you’ve taken the time to listen to them and respect them. This is what engagement looks like and what creates powerful platforms for adaptive change and execution.

Andy put me on the spot – looking for relevant evidence that this type of industry change was achievable.

I didn’t have a tweet-friendly answer, so clarified my position – that whilst I have myself been seduced by the idea of the clean slate, powered by goodwill and balance sheet – I don’t think it’s responsible of us to leave the mess [some of us] created behind. To do so will leave a distracting drain on resources and social goodwill unresolved.

Apparently this doesn’t seem – on face at least – to be an unreasonable position.

But I don’t believe that punishing the incumbents is an effective strategy.

I’m delighted about the huge amount of buzz and excitement being generated around FinTech. There are grass roots startups actually getting out there and doing things the banks should have done years ago. But if you’ve ever been excluded from the cool kids gang, you know what it feels like to be left outside. You may rationalise to yourself that you’re happy where you are, but what you really want deep down inside is an invitation to play. You may, like Groucho Marx, refuse to be part of any group that would have you, but if you’re invited, at least you’ve got the chance to forge new partnerships, ask for help, think and do things differently.

There is an enormous amount of opportunity and, I truly believe, great cause for optimism. What there is not, is an easy route to getting this done. New mindsets, investment and methods of execution are all required.

I’ve got a number of follow-up posts coming on where my optimism comes from.