Following on from talking around the big ten tech themes last Friday, I thought I would follow up with five FinTech themes for right now. This came out of a keynote speech I gave at Celero’s 9th annual technology conference in Canada last week. It was fun with the CEO, Bob Reczka, kicking off the whole shebang talking about the five big themes in FinTech that had risen to the top of the heap over the last year. I agreed with these five themes and thought I’d share them here.
Since 2016, there has been a significant move from banks fearing start-ups and start-ups wanting to disrupt banks, to start-ups and banks working together in harmony. They both offer each other something. A bank has the customers, capital and credentials; the start-up has the ideas, vision and passion. Combine the two and you get a better outcome than each trying to do their own thing.
Data is the air that banks and digital firms breathe. If a bank is going to be effective in the future it has to have great data analytics. I agree with Bob on this one but I still really struggle with how effective a bank’s data analytics capabilities are going to be when it has fragmented, silo-structured systems that fragment and dilute the data. For a bank to get great with data analytics, it has to consolidate all of its data into an enterprise architecture or it won’t succeed.
Digital core with access
Bob actually called this the digital omnichannel strategy but, as those who read me regularly will know, I will never use the word channel in any digital dialogue. Channels are last century structures that we slap onto our legacy systems and embed them in place. Rather we should be talking about moving towards a digital core enterprise architecture, which goes hand in glove with my analytics statement above. The digital core is then accessed by different form factors from a human in a branch (store) or home (customer) to all of the other devices that now need to access my digital core: mobile, tablet, laptop, fridge, television, car, fitbit, underpants …
Digital process and content management
Yes, yes, yes, we need to re-engineer processes, products and services to create stronger digital connectivity and content. Equally, we need to let the machines do more of the work so, in this context, digital content management might be your chatbots engaging in natural language conversations or your roboadvisors creating personalised notifications. That all requires a lot of machine learning, artificial intelligence and proactive, predictive location-based servicing. True.
This is the last but best point: the whole of the bank’s structures are moving into the marketplace of digital services, based upon aps, APIs and analytics. It is the area I keep coming back to when talking about Banking-as-a-Service (BaaS) or Banking-as-a-Platform (BaaP). Banking is becoming a plug-and-play digital ecosystems of interconnected parts and y’all need to work out what parts you can provide, and where you need others to plug-and-play. Then you need to choose those others and get to partner with them before someone else does.
This last point was actually a great question asked at the end of my speech by the MC, Dave Kelly. Dave asked me: “when these guys get back to their desks on Monday morning, what’s the one thing you would tell them to do as an action to put into practice what they just heard?”
My response was diplomatic: “go focus upon the customer and the future customer experience you want to deliver. Then work out if you can deliver that experience better than everyone else out there or, if not, identify who else can. Then go talk to them and partner with them before your competition does.”
This is a key point as the first to engage with collaboration of innovators will get the best deals and the most commitment. Go talk to Stripe or Square as the 20th financial firm in Canada that wants to partner with them, and you’ll get far less attention than if you were the first.
I did want to give them my less diplomatic answer but thought I would save that for this blog. My less diplomatic answer: “take a look at your management team and leadership and reflect upon their fitness, passion and commitment for digital change from the foundations of the bank as a fundamental change program. If you don’t think they are committed to fundamental change, leave.”
After all, the banks that have leadership teams that think digital is business-as-usual with some new tech on top won’t be around in ten years. What job will you be doing then?