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Enterprise Banking? Get Real!

I’m
intrigued about bank organisational structures and how they have little
integration, as a few recent projects I’ve been involved with have
shown the cracks in these organisations. 

In a retail bank, we were
talking about internet, call centre, ATM and branch with the retail
distribution group.  I asked how they were viewing virtual worlds and
social networks.  “Oh, that’s marketing’s responsibility” they
chirped.  “We don’t see those developments as distribution”. 

OK,
what about things like biometric authentication systems for branches or
ATMs then?  “Oh, that’s payments area”, they smirked.  “We don’t see
identity as a distribution area”.

Interesting.  OK, what about mortgages and insurance products.

“Products?  Marketing.”

So what exactly is distribution responsible for?

“Maximising the sales and service capabilities of our people through internet, call centre and branch channels.”

OK, so nothing to do with products, payments or new channel possibilities.

“Nope.”

I then went into an investment bank and wondered the same thing.

For example, do you really have a multi-asset trading strategy?

“Nope.
We sit the teams adjacent to each other, but there’s no real
multi-asset team.  I mean that’s the FX lot over there, here’s our
derivatives traders in UK equities, there’s our commodities group,  and
that is our Eurex futures group over here …” and so on.

What about algorithmic trading.  Does that cut across these groups?

“Nope. That’s Advanced Execution, which is on the next floor.”

Why aren’t they down here?

“Quants, Chris, quants.  You don’t want to mix rocket scientists with barrow boys.”

In fact, it’s true of almost every area of the bank. 

Last
year, for example, I rolled up my sleeves in a payments project where
we brought together the paper and electronic payments groups, the cards
and cash teams, the wholesale and retail payments lads and ladettes.
We had everyone involved in payments brought together into the same
organisation.  The Payments Conglomerate.

The first six months
was involved in introducing everyone to each other as, for most of
them, it was the first time they had met each other.  Then they all got
down to working together … adjacently.

This is why those who provide ENTERPRISE systems will always be challenged. 

An
enterprise does not exist in a bank.  What you have is lots of islands of devolved responsibilities and, a bit like the Channel 4 series Shipwrecked,
where two islands compete for members and the island with the most
people wins, the group with the most influence will always win out.
Cards win over cash.
  Quants win over FX.  Distribution wins over
Marketing.

The trouble is that with so many islands fighting to
be heard, the leader of the Tribe – the Chief (Executive Officer)
struggles to work out how to do joined-up banking.  He or she will mess
about with a  little tinkering here, a change programme there, a new
enterprise system today, a new organisational structure tomorrow … but
each time the CEO takes their eye off the joined-up enterprise banking
focus, the islands will break out and the tribes will be at war again.

It’s just the nature of humans to fight.

So,
as you enterprise solutions firms out there struggle to get buy in from
the CEO’s who find joined-up banking too difficult to implement, spare
a thought for the tribes and their chiefs who are shouting as loud as
they can to be heard.

Now, where did I leave my spear?

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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