I regularly ask audiences at the conferences I speak at if they think we are going through an evolution or a revolution in banking. Invariably, most of the banking people vote for evolution, but I disagree. I think this is a fundamental revolution. A slow one for sure, but revolutionary nonetheless and, if they don’t get this, there is a serious danger they could become extinct.
I liken it to the story of a dead fish on the beach. This dead fish inspired me to compare it to a banker a while ago. It’s a fish that was enjoying great riches, feeding by the shore on the reef. Every day, it went to the reef and enjoyed its feed. Every day, it was feeding closer and closer to the shore as wave after wave hit the reef, but the fish didn’t know or care. It was enjoying a good feed.
Then, one day, a massive wave hit the reef and picked up the fish and washed it onto the beach. No waves followed that were as strong and the fish lay huffing and puffing on the beach. Without water, it would die. And it did. Poor fish. But you kind of look and think, how come you didn’t’ know that these waves were getting closer and closer to the shore. You should have swum into deeper waters?
Well, who knows what the fish was thinking as, after all, it is now a dead fish.
But this is similar to digital transformation in banking. For years, we hear waves and waves of technology change. There’s object orientation and service oriented architecture. There’s client-server computing and data warehousing. There’s multichannel and omnichannel architectures and a move to cloud. There’s Big Data and mobile. Now there’s artificial intelligence, machine learning and data analytics.
Wave after wave of technology hits the bank, and the bank absorbs each wave and internalises the change. The issue is that, just like the fish, each wave is getting stronger. As digital transformation sweeps through the industry, the bank can resist each wave or swim to deeper waters. The banks that resist the digital waves are those who have millions of customers, billions of capital and centuries of history. The bank does not need to change so fast. The bank is robust, secure and resilient.
The question today has to be: is it?
As the digital waves hit, they are transforming the bank. Now, with open sourcing structures, billions of dollars are being invested in companies to transform the whole nature of finance. FinTech firms are reinventing the markets whilst cloud, AI and distributed ledgers are reinventing the back office. Through apps, APIs and analytics the bank is being open sourced.
Without fundamental technology change and technology leadership, the bank is behaving like the fish by the shore. Wave after wave after wave of demand for technology change and digital transformation is hitting the bank, and the bank is just continuing to feed on past customer revenues, products and services.
Banks need to reinvent their products and services for the digital age, or they will be just dead fish on the shore of the future world. Join my Digital Acceleration in Retail Banking webinar with Salesforce at 12:00 GMT on April 27 to find out more and, if you want to, argue for or against the digital waves of transformation in finance.
To discover insights into today's customer banking expectations, download the 2017 Salesforce Connected Retail Banking Report.