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The Digital Revolution is like Marmite for Banks

I presented at a conference in Italy the other day.

It was a small crowd of CMOs from the Italian banks, who listened dutifully to the messages.

The feedback forms were mainly 8, 9 and 10 out of 10s, but there were two or three that gave me 1 or 3 out of 10.

Now I don’t mind that, because I reckon I’m a bit like Marmite.

First of all, I say that banks are being turned upside down by digitisation.

Instead of being built for the digital distribution of data in a networked world, they were established for the physical distribution of paper in a localised world.

Marmite point #1: the bank now needs everything to sit on a digital platform.

I then point out the technologies that are creating this new world:

  • chips inside everything;
  • everything connected;
  • apps making it easy to consume using digital technologies;
  • the consumerisation of technology;
  • social media fuelling a new world of everyone relating to everyone;
  • social finance creating new business models;
  • everything real-time where data represents value;
  • banks as Big Data value stores;
  • the cloud delivering all of the banks’ products via APIs to the end users’ apps;

… and so on and so forth.

Marmite point #2: Chris believes 100% in technology driving the banking industry to change.

Then I go on to recommend that the banks cannibalise themselves.

Rip yourselves apart and rebuild.

Look at everything from product to process to people, and work out how fit you are for this digital age.

Are there others doing it better?

Should you manufacture the cloud services, APIs and apps for the product, process and people; or should you assemble and integrate them?

Do you recognise that you’ve been vertically disintegrated and that customers can build their own banks?

Can you compete?

Marmite point #3: Chris says that technologies are ripping the bank apart and that the bank should proactively do this to see if they are fit for purpose.

Finally, I finish with a view that you cannot be complacent because your target customers and employees hate you.

I show them the Millennial Disruption Index, which clearly states that the under 35's hate banks.

They would rather go to the dentist than visit the bank (71%) and are desperate for a Google or Amazon to take over (73%).

Marmite point #4: Chris is saying banks have not behaved in the customers best interests.

Putting all my Marmite points together, the bottom-line is that most bankers who don’t like my messages think that I’m:

(a) a technogeek,

(b) wrong,

(c) don’t understand banking,

(d) don’t realise that banks are changing and have licences to protect them,

(e) that this is not a revolution anyway, but just another channel. and

(f) can go stuff myself up my own backside.

That’s fine.

They’re entitled to their view and I respect it.

I look forward to meeting them in ten years, when they’re flipping burgers at McDonalds, and asking if they’ve changed their mind at all.


p.s. yes, I did write this on Friday the Thirteenth for a good reason

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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  • N. Stuertz

    Hi Chris
    I am working in a Swissbank in PB Front IT and pondering the same thoughts. I tried to put it into 4 concise statements.
    Hypothesis 1: There are lots of innovative start-ups with little trust and little clients but have new or competing business models based mainly on technology in direct competition to banks .
    Hypothesis 2: At the same time, existing banks have trust and clients but are not fast enough to change technology and business models to satisfy the changing preferences of consumers.
    Hypothesis 3: Strategic positioning of incumbent banks should be a facilitator/adaptor role to combine their own client/trust assts with the value in technology assets of the newjoiners.
    Conclusion: Incumbent banks phlegm to adapt and to rely on clients & trust should combine forces with innovative technology power of new joiners to win the future. This requires incumbent banks IT to consequently change IT and business architecture for faster outward connectivity or platform integration into the own value chain.