One of the great US Bloggers, Jim Marous, picked up on the release of my new book Digital Bank, and asked for an interview with me. As the discussion outlines the book's profile and content rather nicley, I'm republishing the interview here.
It is becoming more and more difficult for traditional banks to compete in an increasingly digital marketplace. With most bank systems stuck in the last century, the conversion of legacy technologies to new platforms with total reliability, security and resilience is a massive challenge.
How can today's banks evolve to a new model of servicing and processing, where the mobile internet allows consumers to bank wherever and whenever they want using an increasing array of devices? How can banks leverage their existing foundation to compete with new and nimble mobile-first competitors?
I had a chance to speak to Chris Skinner recently about his perspective on the evolution of banking, the emergence of new competition, winning the mindshare of an increasingly connected consumer and on the release of his newest book, Digital Bank: Strategies to Succeed as a Digital Bank (available on Amazon for $9.99 for the Kindle version or $17.99 in paperback).
Best known as an independent commentator on banking and the financial markets through the Financial Services Club blog and Chair of the networking forum The Financial Services Club, Chis is the author of several previous books covering everything from emerging regulations to innovation and new currencies. He is also Chief Executive of Balatro Ltd, a research company and a regular commentator on BBC News, Sky News and Bloomberg on banking issues.
In reading an advance copy of Digital Bank, I found that Chris provides a great overview of the digital revolution in banking from channels to systems to emerging currencies. He also provides in-depth analysis of the how incumbent banks such as Barclaysto new start-ups such as Metro Bank in the UK, Alior Bank in Poland and FIDOR Bank in Germany are building for a digital future.
As several noted fintech followers mention in online reviews of this book, Digital Bank is the most recent must-have for anyone wanting to help their organization stay relevent in banking or for businesses wanting to better understand the impact of digitalization on the marketplace.
What inspired you to write this newest book?
What do you hope readers take away from your writing?
What is the biggest challenge traditional banks face in their move to become a 'digital bank'?
By way of example, those that built the bank do not want to destroy the bank they built, so they will do all they can to defend it. If they built a branch-based bank, building a digital bank that destroys much of the reason for the branch-based bank's existence is unnerving. So, they will block all efforts to digitise the relationship. That is the core challenge . . . how to convert the traditionalist decision makers to really commit to digital. Once you have that commitment, it's still not easy, but no bank will succeed if the management team is not truly committed to the program.
What institution(s) globally have made the greatest strides to embrace the future? Why?
Are newer organizations (as opposed to traditional banks) better positioned for the future?
Yes and no. From a technology standpoint, newer organizations are obviously better fit for the future as they start from a clean operation. There's no legacy systems and there's no previous installs of branch networks, contact centers or online banking. So, they can really push the boat out for creating the right infrastructure and process for customer engagement at the outset. That's what Moven and Simple are doing in the USA, and we see other examples like FIDOR in Germany and Alior in Poland that are doing the same.
None of that is easy, and it takes deep pockets to get a bank licence and the guarantees that go with this. But, here's what stands out for Metro Bank . . . the fact that they were fit for the future with technology meant that they reinvented their digital bank services within three years of launch. They are on their second generation internet banking platform already. That's down to having the right technology operations from the get-go, to be able to be that nimble and quick. So, I would say that new players are fit for the future from a technology standpoint, but they need to be fit for the rules from a bank standpoint before they can really play.
If a bank wants to be positioned for the future, where should they start?
Ideally, create a new team with a leader from outside the bank who can look over everything with a fresh pair of eyes and create the future without constraint. The hard part is then taking that team's thinking back into the bank, as it usually means cannibalising or destroying parts of the old bank to build the new bank. But it can be done. Again, it all goes back to how committed the CEO is to the process. If the CEO is committed, then anything can be achieved.
What is the biggest change we are going to see in banking in the next 5 years?
About Chris Skinner
Chris Skinner is best known as an independent commentator on the financial markets through the Finanser (www.finansernextjs.wpengine.com) and Chair of the European networking forum the Financial Services Club, which he founded in 2004. The Financial Services Club is a network for financial professionals, and focuses on the future of financial services through the delivery of research, analysis, commentary and debate and has regular meetings in London, Edinburgh, Dublin and Vienna.
He is the author of nine books covering everything from European regulations in banking through the credit crisis to the future of banking and is a regular commentator on BBC News, Sky News and Bloomberg about banking issues.
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...