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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.
- 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.