Exploring Barriers to Change
Navigating through entrenched banking processes is a challenge faced by many fintechs. New but value-adding systems can be hard to sell internally – and change is challenging to implement. To quote John Kenneth Galbraith,
“Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.”
In this series we explore some common misconceptions that may hinder a much needed change in our industry. This week we are focussing on the sell-side.
If we don’t start a race for change the status quo will remain:
We need to change our point of view here. It is not about each one bank getting ahead of the pack. This is about how we modernise our industry, form a good basis from where a number of business and technical improvements can occur. We haven’t got the more advanced technical basis in place yet. We all need to work together to make it happen. The benefits will have a positive impact for all banks, reduced deal costs, better data usage, business retention and talent retention. But we all need to work together.
Our clients are happy with the experience they receive at present – at the end of the day they haven’t complained about it:
In any service industry, to remain competitive we should always be looking at ways to enhance our customer experience. A combination of smart digitalisation and personal touch is creating loyalty and enhances client retention. It’s cart before horse – in many instances clients don’t know about what hasn’t been offered to them yet. But, as soon as they experience new and improved systems, they don’t want to go back. We see this all the time through our daily interaction with both banks and issuers.
If it ain’t broke, don’t fix it:
The culture across the international banking industry is one of resistance to change. The idea of innovation prompts fear of disruption of established routines, process duplication and structural reorganisation. There is however always a smooth, carefully curated process of introducing innovation. It needn’t be a binary process. It is more about evolution than revolution. Staying with the old way of doing things is not solving any problems – it is just pushing inevitable change down the line until it becomes super urgent. We don’t need to get to this point.
We know there is a lot of manual effort involved currently, but it has always been like this:
More often than not our colleagues take things as given. They have been handed a process that “works” and keep using it even though it is dated and obsolete. With access to specialists within the banks who understand both the process and opportunity with innovation and tech, the DCM teams can challenge the existing protocols with expert support internally. In the future it is all about “smart” working, collaboration of experts and systems for the best possible result.
Manual work, using spreadsheets and emails, means that we keep things flexible:
There is a myth we need to dispel here, manual work was introduced in order to create processes and workflow fast even before a technical solution is in place as business is the priority. Unfortunately what usually happens is that this manual work stays in place forever and a lot of productivity is lost that could be channelled in growing business further. Manual work can provide a kick start but in the medium term it is limiting the growth potential.
There are so many solutions out there we need to wait until things settle a little:
Tech adoption is happening at breakneck speed – and the offer keeps improving. There is no ‘settle down’ – financial institutions need to ask themselves ‘how soon can I jump on board’.
In conclusion – mindsets need to shift. Cultural change and trust will take a little time – but the change will come and opportunities snowball.