For many years now, I have pleaded with bank executives to change. Begged for them to be digital. Prayed that they get the message and transform.
Looking back over presentations made in the 2000’s and 2010’s, the message is the same: the leadership team need to ‘get it’. Get what? Get the fact that you cannot delegate digitalisation. It needs everyone in the executive to believe for it to happen.
The interesting thing, looking back over those presentations, is that some slides remain after all these years. Specificallly, the digital business model, the explanation of fintech (a partnership between parent and child), and the issue of bank leadership focusing upon banking rather than true digital transformation.
Well, it is clear that truly digital banks have a different way of thinking. I often come back to a conversation with a CFO of a major global bank who I interviewed for the book Doing Digital. Halfway through the conversation, I asked why she had not mentioned anything about cost, profit, ROI or anything to do with finance in our conversation. She said words to the effect of: “our focus is on the customer and the customer journey – everything else will be realised from that”.
This was an eye-opener. Focus on the customer? Who would have thought of that?
That particular bank has achieved great success as a result, as they have reinvented the bank from the ground-up to be truly digital but 100 percent based upon customer experiences. Radical!
Then I walk into the boardrooms of many banks and find myself lost in risk, compliance, regulation, profit, cost-income ratio and similar discussions. Technology is in the mix, but it is just part of a bigger equation. It is not top of the list.
That’s fine. You do what you do. Yet, when I return to slides I have used for decades it sometimes makes me think that I am preaching to the unconverted or, more disparagingly, preaching to the unconvertable.
There seems to be a tranche of banking culture and bank executives who will never see digialistaion or technology as priority. The priority is to manage risk and leverage returns. That’s fine, but can you not see that technology enables you manage risk and leverage returns?
The banks that ‘get this’ are far out-stripping the banks that don’t, in terms of market share, net promoter scores, growth, ROI, ROE and more. The issue I guess is that they are not out-stripping their peer group in terms of share price and investor performance.
It’s getting there, yet isn’t it funny how the message, for example, of close branches and move digital has been discussed for decades … yet, many banks have only just done this. Do the stats show that the banks who did this first got more leverage and higher returns than the bnaks in catch-up mode? Do the stats show that the banks that launched online and mobile banking first, have higher market share and growth than the banks who came later?
I don’t have the stats to hand but know where to find them. Question: do you have the stats?
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...