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Please refer to the Digital Department

I have this cheesy line in my presentation about digital is a journey, not a destination.

The destination comment is that most senior bank management think it’s a one-off project, like building a pyramid or a cathedral. You make the investment and it’s done.  That’s not the case.

Digital as a journey requires this to be more of an evolution of bank processes that are continually reviewed, renewed and stretched to meet the challenge of the digital age.

Take the average bank.

Most banks deal with digital as a project that has to be delivered.

They create a digital team, allocate a budget, hire a Chief Innovation person and off they go.

PFM is delivered; apps are rolled out; and plaudits are given for the great work done by the team. 

Then that’s it.

A multimillion dollar program of delivering nothing.

This is because digital is more than a function.

It’s an attitude.

By creating a team and investing in that team, the CEO thinks they’ve done the right thing but, rather, they’ve just built another appendage on the side of the organisation.

A little bit like the ‘channel’ discussion, digital is just an adjunct to all that’s gone before.

It’s not a critical underpinning for the future, and that’s where they’ve got it wrong because a digital architecture should be seen as the core framework for today’s bank.

Everything else is layer cake on top of that digital undercarriage.

In this way of thinking, digital is the core underpinning of the bank.

Branches, trading, processing, messaging, everything else is layered on top of that core.

This is the mantra I’ve been shouting for years (see first blog entries from 2007) and still shouting today, as I don’t think it’s heard.

If digital is the core, then why are banks still running that core on systems from the 1980s or before?

If digital is the core, why are banks adding this as a layer on top of branch, call centre and internet – an omnichannel?

If digital is core, why are CEOs of banks designating it as a function and saying it can be dealt with as a project?

I don’t get it, it doesn’t wash and it doesn’t work.

You cannot designate responsibility for the bank’s future to some superstar innovator, unless that innovator is the CEO of the bank.

This brings me back to digital as a journey versus a destination.

Allocating digital to a function is the destination view. 

The objective is to show that the bank is doing this, and that means the usual way it works is:

We need to compete with Pingit, T-Mobile, Square, PayPal, Hello, Soon, Bank of America, Hana or whatever … here’s $100 million. Go do something.

This is treating digital as a destination.

Instead, it should be:

We need to position ourselves with a strategic plan that will place us at the forefront  of digital Finance (ahead of Pingit, T-Mobile, Square, PayPal, Hello, Soon, Bank of America, Hana or whatever) … let’s work together as a Cross-Functional Senior Management Team to make it happen.

Make it the culture and priority of the bank.

Put it at the centre, at the core, as the central underpinning.

Make it a journey and make every CxO accountable for delivering.

Don’t delegate it, as you’re just shirking your responsibilities to your customers and shareholders if you do.

That’s the point.




This is Part Five of a six-part series on being a Digital Bank:

Part One: Major parts of banking are stuck in the last century

During my lifetime, two things have fundamentally changed the world: travel and technology.

Part Two: Heidi Miller, Bitcoin and fitness for purpose

Building on yesterday’s theme about how a cheque from Canada has taken six weeks to process and had significant processing charges taken from the deposit as a result, reminds me of Heidi Miller’s speech from SIBOS 2004, which is still talked about today.  What did Heidi say that was so compelling?

Part Three: We are not Borg, we are Human and dancing to a different tune

Building to the theme of the divide between the old world of finance and the new, and why (some) banks aren't fit for the 21st century, brings a few more points to mind, in particular about control and centralisation.  Banks were built as control freaks.  They need to own the complete end-to-end cycle of everything.  They have to develop their own software, systems and services, which is why they end up with more developers than Microsoft as a result.

Part Four: You may be innovative today, but tomorrow you're just an incumbent

I’m going to give up on the discussions about banks dragging heels when it comes to the global net soon, but only after a few more pieces of debate.  Today, it’s all about innovation.

Part Five: Please refer to the Digital Department

I have this cheesy line in my presentation about digital is a journey, not a destination.  The destination comment is that most senior bank management think it’s a one-off project, like building a pyramid or a cathedral. You make the investment and it’s done.  That’s not the case.

Part Six: Banking-as-a-Service, five years later

In a final note on the Digital Bank Transformation, I return to a theme I’ve explored a few times (from Banking-as-a-Service to APIs and apps). The core of the model of banking is represented in various ways, but I encapsulate it as three companies in one: a retailer that has customer intimacy; a processor that has operational excellence; and a manufacturer of products.


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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  • George Ravich

    Great point Chris! I want to add to your post with the following: Digital is becoming central to all businesses – especially those that are information based like banks. That’s because they can so easily be disintermediated or rended obsolete based on the IT they develop and deploy. Today IT is the number one differentiator. But what is digital? I think it refers to the ability to add mobile everything! Not just banking services, but the Internet of Things where there are low priced sensors sending in data from everything that moves. The insurance industry is surly being disrupted by sensors in cars that can price insurance based on actually driving rather than the driver’s demographics. Couldn’t this be adopted to banking, trade finance, etc. And all the data streaming in needs to be analyzed to help make those business decisions – point number two for digital business – which is the use of big data. Being able to have massive channels of streaming data, analyzed in real time will change banking – an industry that is built on assessing risk and pricing it’s products based on it. That to me is the digital disruption now upon us in banking.