I just finished presenting on Digital Bank strategies and Fintech, and was asked a wide range of questions:
- How do we transform our legacy structures?
- What is the biggest obstacle to becoming a digital bank
- You mention partnerships but all cooperative structures failed in the past, how can we succeed in the future?
- Can you show us someone who is doing this right and making it work?
- What should a bank do when we have millions of customers who trust us?
... and more.
I kinda realised something at this point that hadn’t struck me before or, rather, it had struck me but not as visibly. Banks are worried about the future, not complacent.
I guess that is why I am being paid to talk, consult and write about this stuff, but it didn’t hit me as noticeably as it did today (probably because at most conferences, no-one asks any questions).
One lady came up to me afterwards and said: the problem is we all know we need to do something, we just don’t know what to do.
I said it’s pretty easy, and started re-iterating my underscores about digital needs to be seen as core, not periphery; it needs to be invested as a continuum, not a project; it needs to be seen as foundations of the bank, not a channel of the bank; it needs to be articulated clearly about what it means to the bank and led from the top; etc, etc.
She intervened fast and said: I hear you, I hear you, I hear you Chris, but you don’t get it.
It was then I got the message: Our bank is led by someone who doesn’t get it. He’s assigned digital under the leadership programs but, when it comes up, you can see he switches off. All he’s concerned about is regulation and compliance. Digital is on the back of the bank’s envelope, but it’s not key.
It was then I realised I was talking to the head of digital at the bank. Oh dear.
I must admit that I encounter this frustration more and more often. The frustration is that the bank is worried about fintech, has woken up to digital and are thinking about what to do. They’ve invested in apps and APIs, restructured services, trying to get off legacy and doing the things that should be done. But the problem is the CEO doesn’t get it. The CEO has grown up in the bank, understands the bank, loves the bank but has no idea what this digital stuff is all about.
A great example was another conference attendee who runs a group that represents bank thinking. He said they had created a fintech focus area but were struggling as no-one in the group knew anything about fintech or digitalisation. Sure, they all knew about bank risk, compliance, counterparty systems and mandates and such like but digital? Fintech? Oh no! Bring in the nerd.
So, I know now something I’ve known before but can articulate better than ever before. If your CEO is not leading change and articulating a digital vision, then what are they doing? If they have a team delivering digital change but appear to have delegated their responsibility to be part of that change, thn what are they doing? If you are seeing inertia and complacency about fintech and digital in your bank, then show them Jamie Dimon’s shareholder letter and scream: WHY? If you are in a bank that needs to wake up to digital and fintech, then make sure that the CEO is awake first. Finally, if you are in a bank that has not even got this in their agenda … leave.