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If you innovate, I will follow

Sometimes I get into a rant, and I got into a bit of one at Finovate.

It was during the lunchtime session, and a banker said to me that they liked all the presentations during the morning but wouldn’t be doing anything about it.

“Why not”, I asked.

“Oh, because these guys are all showing experimentation”, he responded. “And my bank won’t invest in experimentation. They want proven systems and results, and will only follow something that is shown to be viable and works.”

This is so often the comment made by bankers I talk to, that it’s the prevalent attitude within the industry.

For example, many years ago someone told me the parable of the swine in the bible and compared it to bankers.

What was that story?

Oh yes, the pigs were filled with unclean spirits and thousands of them ran as a herd into the river and drowned.

The banker was relating that to his industry, and saying it’s how banks behave.

They follow each other mind-numbingly into good or bad waters without care, as long as they all follow together.

Another banker told me a similar story about banks being like sheep, and another about bankers being lemmings.

The theme is always the same: we don’t want to lead, we want to follow.

But innovation is never created by following.

Innovation is created by leading.

If an innovation was proven and could be followed, then it’s not an innovation.

Innovation is about creating disruption to business models that are compelling.

And that’s why retail banking is not about innovation (investment banking is different).

The reason retail banks follow is that there is no need for speed, no need for change, no need to be compelling.


Because the industry is cosseted and protected by licences that make it hard for new entrants to compete.

And when a new entrant does start to compete and take off … then the banks can follow and replicate their business model pretty easily and wipe them out.

That’s why there is little new entry into banking, and mainstream retail banking has hardly seen any new entrants in over a century.

That’s why there was such a big hoo-haa over Metro Bank’s opening in the UK but, take note, Metro Bank is created by a banker.

It’s backed by bankers, and by someone who successfully sold a bank.

So real new entry into banking, with innovation and different industry thinking, is really hard.

This is why so few bankers attended Finovate and, of the ones who did, most were just there to observe and not to act.

The real activists were therefore the fintech community, the venture capitalists, the disruptors and the industry agitators … in other words, those who will innovate because they want things to change.

Meantime, for the bankers who did attend, I dedicate a song to you.

It’s an old one but, for those who attended Finovate, you’ll know that 1980s cheesy music is the mantra. Here’s the banking industry’s song:

For all bankers, their mantra seems to be: “If you innovate, innovate; innovate, innovate … I will follow.”

Seems to have worked so far …


About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.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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