Thinking out loud in the middle of my home town summer time…
You will not find a single financial institution saying “we don’t care about innovation” … It does not look right, not good to investors, and not very stimulating for your customers.
Without being too generalist, you innovate because you have something new to sell or build, or because you can do the same better, cheaper or faster.
Innovation means efficiency, more often than not. And unless you have very stupid customers or shareholders, efficiency means leaner cost structure, and very often it comes handy to no lay off people and keep doing the same with the double (conservative) of the resources needed.
Almost every banker will name regulation as the most compelling reason stopping innovation to happen, or at very least make that process very difficult.
This is half of the truth, if you hear me.
The other half is about …..
…. Technology readiness (and subsequent lack of agility).
You can build a full bank, in the cloud, in few months, with close to the same security and scalability standards of any other bank in the market. This “new” thing can also handle alternative currencies, multiple wallets, mobile payments, Personal Finance Management, and if they are honest enough, even services like forex AND remittances way cheaper than the actual bank rates (and for sure cheaper than Western Union).
Ask a “old world” bank to do the same, and the CIO will say: sure, but with a multimillion dollars budget and one of the IBMs of this world drinking too much champagne way before Xmas.
The question still remains: do banks even care ?
Banks are, like every business, a collection of human beings, that in average tends to put their own personal agenda on the forefront of the criteria influencing their decision. It s human.
We are at this generational break, where most of the highest ranked managers of the top 100 banks in the world will NOT see the real disruption coming.
All they see today is that some guys not wearing suites anymore, few very successfully, building businesses in the banking space, and in a new paradigm.
Say peer to peer and peer to SMS lending.
Take all the IWOCA, WONGA, ZOPA, LENDDO, AFLUENTA. AMP and even the microlending platforms of this planet, all together: I don’t know if anybody has done it yet (why bother, again) but I am pretty sure they are, all together, damaging a single digit fraction of the whole credit business, worldwide.
So many of the today decision makers will no longer be by the time all that will become a real disruption.
Too simplistic? Maybe, but this is my blog and there is freedom of expression right ;-)?
It takes a bright, charismatic, outspoken, self awareness energy to embrace the innovation and disruption side of the financial services. You know why?
Because compared to the way they are today, the ” disrupted, innovation-driven, new ” financial services would be
– inclusive (not cheaper for the rich)
– more efficient
– for the greater good
… and there is only ONE Professor Yunus, of the Grameen Bank, every HUNDREDS of today financial institutions CEOs.
Stay tuned, have been off for a while, lot of things have happened, need to spend some more time writing …