The First 5 Steps to Transform Your Bank

Sarah Mikutel
5min read

At 11:FS, our mantra is digital banking is only 1% finished – meaning we’ve got a long way to go before banking becomes truly digital. This is an exciting place to be, but how will we get there? 11:FS CEO David M. Brear answered that question at the Technology Disrupting Finance conference in Oulu, Finland. Watch his keynote here and read 5 takeaways below.

Back in the good old days of branch banking, we had a lovely sort of full range experience. People knew who you were. They didn’t need a database to remember how you had your tea, how old your kids were, what their names were. The service was beautifully personalised. Then internet banking came along, and all we got was a dumbed down branch experience.

We went from paper statements to internet banking statements to mobile banking statements. Where’s the evolution in this? Does this feel good enough? Banking has become about selling financial products, not about delivering financial services, and that’s quite a bad place to be.

Should the big banks be worried?

In addition to the challenger banks coming for the traditional players, the looming threat, is the Alibabas, the Apples, the Amazons. The tech giants have more money to spend on R&D, bigger customer bases, and can outdo anything that a financial services company can do.

What can legacy banks do?

  1. Focus. Where do you start? This is usually the most paralysing part of the journey. “Okay, well, I like AI, I should do something in AI.” No! Don’t do technology for technology’s sake, or just because you think it would be fun.
  2. Change how you sent up your team. Digital is a small team sport. What you need is more of a SAS mentality. You need the 10x developers. You need the 10x user experience designers – and then you only need two of them.
  3. Core banking should be your digital heart. Some of the biggest banking organisations on the planet suffer from not having real-time core banking systems, and it’s quite scary. It shouldn’t matter if it’s branch or telephony or digital channels or mobile, it should just be accessing the same services, the same capability, and delivering them to people in a compelling way.
  4. Hire digital leaders. Technology is such a massive part of banks, it’s quite scary that so few people in such senior positions in banks know so little about technology. In the UK, we’re only seeing about 12% of bank boards have any level of tech experience.
  5. Outsource. If you’re not the best at something, find someone who is. Outsource IT to a company who does it well, and once it’s in a shape where you can manage it, the cost efficiencies are acceptable for what you need to do and operating cost has come down, then bring them back in, by all means.

Digital banking is only 1% finished.

That’s where the future of banking will go. The idea that a bank needs to do everything itself, that they need to create their own products, that they need to sell their own products, that all of IT, all of the technology, is all created by a bank, in a bank, has gone away.

If digital banking is only 1% finished, then there’s 99% to go, isn’t there? And for me, that’s an incredibly aspirational message. We have to deliver on that 99%, and for me, that’s the of fun of it.

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