Change – FINthinkers

Banking Today

The word bank immediately depicts the picture of queuing in branches, limited quality products, and legacy processes ( e.g. time to process transfer or payments, etc…). The list goes on and on whether it is overdraft charges, processing/ service fees, overseas call centre. Although in the past, prior to the digital revolution, communication and processing were performed physically and was an important valued service appreciated by its consumers (Change is inevitable, Importance of a brand’s digital behaviour). However in the digital age, this will change with the introduction of financial capabilities not through new capabilities from existing incumbent banks but by new players outside the financial sector.

What will these players offer? Will they offer radically different products, new approach(s) to customer service and radically different ways of integrating to the customer’s ecosystem offering customers genuine and value added financial services? Or will these new ventures, like many of our existing banks, simply pay lip-service to such ideas?

What would we expect these new ventures to provide? To say the least the following:

Fewer but relevant and value-based products base on the customer’s preferences. Keep it simple, make it fun, empower the customer.
Financial services anywhere anytime (Omni-digital). Ubiquitous and available when we need any forms of financial services through the customer’s ecosystem. Services that interstate with their connected life.
Personalized services and recognition. Knowing the customer personally. Listening to the customer
QR code a standard for payments where payments happens instantly with limited to no infrastructure required
Work the way customers work. Be where they are, be there all hours, respond now.
Be the kind of financial services that I want to work with: be involved.
Rate and fee sensitive/ free
Be the overall financial caretaker. True advisory relationship.

What are your expected capabilities?

Giving direction …

The world continously evolves and changing exponentially (see Change is inevitable ….). Not long ago the pace in companies was much slower. Propagation of information took time and the production of goods was typically labor intensive. The main challenge was organizing processes and workforce efficiently towards maximal outcome. These mechanisms which used to work well in the industrial age increasingly fail to produce beneficial effect in the information age.

Today’s environment routine work is automated and commoditised whereas engagement and creativity have become major assets of organizations. Great organizations have a shared goal, a state they want to reach. This reason d’etre has become more important than ever before. The vision is the mechanism to create a pull into one direction. A practical guide for creating plans, setting goals and objectives, making decisions, and coordinating and evaluating the work on any project, large or small. It is the source for motivation within the organization.

A vision captures clear and inspirational long-term desired change(s) resulting from an organization or program’s work. The vision is important – it expresses why the organization is required and provides guidance and direction to all who engage.

Alzheimer’s Association: A world without Alzheimer’s

It is obvious that the people engage here want to contribute to a world free of Alzheimer. They can do this however as they want as the vision does not say what has to be done. Everybody can contribute with his skills and abilities. People will have different perceptions on the importance of this organization, but nobody will be against this vision.

You may now say that this is just a simple and straight forward special case. Indeed – it should all start with a ‘why?’ which leads to people sharing the idea forming an organization. The vision is what makes this organization special and different from others.

Below is a list of vision statements of some other organizations

We create the technology to connect the world
We believe in what people make possible
Organize the world’s information and make it universally accessible and useful.
To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online

You engage and be part of only if you agree with the vision . Shaping a vision is not easy – it requires creativity, setting standards and enforcing clear decisions. People may like it, dislike it or find it irrelevant.

Many incumbent companies in the financial sector started with a clear vision. Some of these goals were reached and the companies just continued to do what they are doing. They just repeat what they have done in a better and more efficient way. Without having a vision it becomes difficult to be innovative and cost efficiency starts to become the main goal.

As a little exercise look at the web pages from incumbent organizations in the financial services industry and try to find their vision statement. It’s interesting that only a subset of the companies have one.

XYZ’s vision is to be recognized as a leading manufacturer of protective materials for high reliability applications throughout the world.
XYZ’s main commitment is to provide its customers with the best solutions possible

These two examples sound really trivial and the vision can be used for most types of organizations. Or is there a company who does not want to be reliable or provide the best solutions? This lack of purpose is dangerous – as there are many organizations with the same aim there is no evident reason, why this specific one is really required.

This lack of a vision is also dangerous as the new organizations all have vision – typically not talking about themselves but about the state they want to reach.

We believe everyone should be able to enjoy a healthy financial life.
We’re building this bank for you. We’ll learn and adapt to you, celebrating your individuality in every way.
By solving your problems, treating you fairly and being totally transparent, we believe that we can make banking better.

Compare the examples – which one is more appealing? Where would you like to engage as an employee or become a client? The incumbents benefit from their history as people are quite slow in changing their habits. But “time to change” is not the factor we should rely on in this “game” as when change happens it will be instantaneous.

Many incumbents relax on the fact that they are today systemic relevant – but the system could change and the relevance vanish with it. It feels much better to have a clear vision of the future than to rely on the past.

So it’s time for many incumbent organizations in financial services to hit refresh …

The first step is key …

In the previous post we looked at Getting in and out of the box at will …. Thinking and acting outside the box is not easy at all.

The post Three Things You Need To Know About The Brain To Build Great Teams by Everett Harper shows some reasons for this based on Ellen Leanse book, The Happiness Hack. We all want to be happy. Our brain experiences two forms of happiness:

One, “hedonic” happiness, is associated primarily with fast reward dopamine cycles
The second “eudiamonic” form seems to rise from longer, slower reward cycles associated with serotonin

The post states that we have been hacked and are now flooded with hedonistic fast reward happiness. We must break free when we go out to explore the boundaries of our box to finally start thinking and acting outside of it. Once we manage to leave the box this triggers new insights causing ‘eudiamonic’ happiness but also fear.

Fear is the natural response of the brain to new experiences. The brains main purpose is not to think but to keep us safe. Keeping us safe works best by following routines and patterns. So the safe place is in the box where we follow what used to work. To get outside and break with routines and habits requires explicit action, it’s hard.

And finally once you have left the box it will be hard to convince others to move. They comfortably sit in the box. The perceived good place is in the box, talking about better alternatives is perceived as negative. But routine tends to be boring – a convincing and exciting vision may help to get things going.
People often say that execution makes the difference. Maybe it is the decision to make the first step ….
References:

What Happens when Contrarian Thinkers are Ignored?

Getting in and out of the box at will …

I recently read Don’t Just Think Outside The Box — Go In And Out Of It At Will by Bruce Kasanoff. The post was about Eric Lee, a specification writer who started to successfully paint on glass motivated by his wife.

“Here’s what I find most fascinating: Eric never stops thinking about what’s possible and how he might stretch the boundaries of where and how his art finds its way into the world.”
“I don’t think out-of-the-box,” says Eric. “I believe in knowing where the box is, and going in and out at will. I don’t want to be pressured to always be edgy. Sometimes there are classic techniques that work best.”

Do you know what and where your box is? Do you know its boundaries? This is actually a very interesting and also challenging question. Do you know the boxes of the people you interact with or the boxes of team members at work?

Thinking and acting outside the box and experiencing the world from different perspectives with fresh eyes is increasingly important in our fast changing time. Start by thinking about your box(s) as you can only step outside the box if you understand the boundaries, the paradigms and habits which make the box your box.

“Thinking outside of the box allows you to get rewards outside of your reach.”

― Matshona Dhliwayo