It’s intriguing to see how people react to my presentations. I am direct, some call me blunt, but my content is based upon deep research that mixes desk-based analysis, my blog, endless conversations around the world with bankers and technologists and a lot of experience. I’m not saying others are wrong, but I know I’m right most of the time.
Sounds arrogant? Well, it’s not meant to be. It’s just that every time I’m going off course, I find something reaffirms my correctness. By way of example, I sometimes think I’m too mean to bankers and surely, they aren’t that bad. But then I get a figure from Gartner saying that 76% of bank leadership teams believe digital means banking-as-usual and zero change to their business model; or I get a Harvard Business Review research report that says banks are failing to embrace digital due to their legacy leadership; or I get an Accenture study which shows banks have zero digital leadership or vision; and, and, and, and, and …
Therefore, it intrigued me that Bill Streeter of Banking Exchange wrote a critical but accurate summary of my Money2020 presentation last week, finishing with the lines:
Skinner’s time slot was only 20 minutes so he didn’t take questions. He may well have gotten pushback on some of his points. Based on conversations with attendees and comments made at other sessions, bankers at the conference weren’t buying the notion of bank obsolescence or extinction.
I welcome all questions if there is time, but it is interesting that this was the take-away of the bankers as I made no comments about banks being obsolete or extinct. I guess they heard my one line joke about a FinTech startup who said that his son likes to play with dinosaurs, and so does he (talking about his bank partnership), but I am categorically clear in my presentations, if they are longer, that banks are here to stay … as long as they adapt to change.
In this context, what needs to change? What is the right and the wrong change? Is it incremental or fundamental change? Evolution or Revolution?
My rally cry is to get them to see what they have to change, because most are adapting to change the wrong things. For example, I saw another recent survey of senior bank leadership and 80% said they had done digital. Done digital what exactly? They had done a mobile app? A blockchain proof of concept? A bit of AI on their risk portfolio and exposures? Some APIs for the Open API initiatives?
That’s what they have done and that’s what they think is digital. We have done digital.
You haven’t. You’ve done nothing. You’ve added more peripheral technologies around your silos and legacy, and changed nothing at the core. I’m not even talking core systems here. I’m talking core thinking.
The biggest issue with banks today is that their leadership teams lack the honest-to-god depth of knowledge about what digital really means. As a result, they are sleepwalking their institutions into obsolescence and extinction, because they are not adapting to change the right things. They are adapting to change things based upon the short-term, myopic view they have of technologies, and believing it is banking-as-usual at lower cost with higher revenues through digital.
It is not.
As I keep saying over and over again, digital demands a fundamental rethinking of structure, products, services, organisation, management and operations. Banking was built for the physical distribution of paper in a localised network focused upon buildings and humans. Digital banking is built of the digital distribution of data in a globalised network focused upon software and servers.
It is a completely different business model and not banking-as-usual. It is a Revolution and not an Evolution. It is fundamental, not incremental, change.
So, for those of you who didn’t hear me say that banking will survive as long as it adapts to change and embraces true digital transformation ... wake up and smell the Dodo.
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...