Banks, technology, agile and the consumer

To start with, we have to talk about the connection. Why should anyone in banking ever care about the future of work, lean, agile, product culture or any such other terms? Don’t we collectively already have our hands full with new terminology, ideas concerning fintech and so much technology to understand that we’ll need to go back to grad school?

It wasn’t even that long ago that the mere connection between banking and technology wasn’t clear either. The fact that the consumer wanted not only a money service but a digital channel is new to banks in terms of what they are expected to offer.

Not long ago, the prevalent rhetoric in the financial services industry was around selling “banking products” and it wasn’t until later on that it changed to focusing on “services” and the “relationship”. It is only now with the advent of digital that we realize it is both, wrapped up in a layer of digital experience that nowadays is expected to rival that of other technology offerings that customers are using, such as their social media, their ride-sharing apps or their delivery services.

Festina Lente

So while from the vantage point of being in “the belly of the beast”, things seem to be all but paralysed and progress seems frustratingly slow to those of us in the industry whether we find ourselves on the fintech side or as one of the bank employees with an appetite to be a change-maker, the reality is that in the grand scheme of things, change has descended upon the banking industry only in the last 15-20 years, so it’s no wonder that such change is not coming with comfortable clarity and an easy execution path.

The nature and depth of change overall is different in banking than other industries. This is because of the undisrupted nature of the business which has existed in an immutable, steady and unchallenged state with no enemies at the gates and, in turn, no imperative to innovate and no competition to worry about for the past few hundred years. The change required to make the leap to the modern day expectations of consumers is so extreme, that the term “transformation” is used more in banking than most other industries.

Not only does the financial services industry have to innovate but it needs to completely transform itself and make fundamental changes in both its technology and way of thinking to stay competitive.

Why is this change urgent?

For one thing, as mentioned above, consumers’ expectations have changed substantially in the past 10 years alone and now the standard level of demand is on a par with what they get out from any other type of technology when it comes to banking.

For another, and in a type of danger bankers love to either parade or ignore depending on political agendas, incumbent banking is under siege. There are a whole host of entities seeking to challenge its position and become the main provider of money-related experiences to the consumer from fintech start-ups to challenger banks and big tech players. Their entry into the market is not only motivated by a willingness to compete in the space, but underpinned by welcoming, facilitating legislation. This means that incumbents can no longer ignore the aforementioned consumer demands and must find a way to effectively compete.

It is only the banks which have understood the scale of the threat posed by such competition and are therefore truly committed to deep change that will transform not only their antiquated systems but their mindset and culture as well.

Are change and agile interlinked?

Going toe-to-toe with the technology giants that are digitally native in terms of their outlook and process means being able to create and execute experiences to wow the end consumer and do so at the same pace as them. This is why there is a need to understand and employ technology as provided today in a DevOps, agile fashion.

In essence, for banks to remain competitive in the next 10-20 years they must stop being distracted by minor trendy topics and look inside their organization. They need to focus on the bigger picture of finding ways in which they can truly transform themselves where they compete with these challengers that have the whole deck stacked in their favour in terms of both technology and the way they employ it.

To create competitive digital experiences and “money moments”, banks have to find ways to dig deep and uncover the passion and courage of each and every one of their people so that they can urgently harness it in an agile mindset.

That’s the only way to be able to use technology to reach their customers’ hearts and remain competitive.

Duena Blomstrom speaks on this topic at Connecta Bern.