Fintech is the new revolution in financial services ! A number of you may not be aware of the huge development of this new branch of finance. It’s made of startups allowing customers to access a service (payments, investments, crowdfunding, peer to peer lending…) with no intermediaries. As founder of the Solvay Fintech Marketing Hub, I’m studying the emergence of this new sector and I can tell you that banks are worried. While some are not yet conscious of the danger of cannibalization, most now realized how fast they could be replaced by these new players. They are moving towards collaboration with them. But it’s the same clash of culture as we saw a few years ago in other industries.
We all know about the Kodak syndrome. To summarize the story, read http://oser-performer.com/2015/08/22/oser-performer-50-how-could-your-company-avoid-the-kodak-syndrome
In 2012, Kodak, this huge profitable company « had managed to enter the exclusive club of companies, made their mark in common brands like: Aspirin, Bic, Canadair, Jeep, Post-it,…Kodak was a goose that layed golden eggs that nobody wanted to kill – especially not shareholders focused on short term results. The Top Management was « cool » and attended to a growing or stable trend of financial results, where everything was fine … so why introduce disruptive change? Its industry would eventually switch from analog to digital. But the time to wake up, to dare to make courageous decisions, to have courage – it’s hard after years of comfort… it was too late. Sony, Nikon, Canon were in place… customers left and it was the end. Kodak disappeared in few months. »
Banks now face the same challenge. As traditional players in a new moving game, first reactions of many of them were lack of vigilance and some degree of arrogance. Then, suddenly the Fintech trend is accelerating. Faced with the inevitable, some still take time to think, evaluate, consult and hold numerous board meetings leading to further analysis. Others are moving, investing, partnering, shaking their culture. But it’s tough ! We ‘re seeing a culture schock here. Many banks lived in a wadded atmosphere. They lost consumers’ confidence during the finacial crisis of 2008 and they didn’t wake up.
So the question now is : can banks be entrepreneurial again ? Well good practices examples are hard to find. We can point out Danske Bank, a Danish bank who decisively implemented a customer oriented approach, entirely reviewing their processes from the customer’s point of view. http://bit.ly/2mUMqCV Their last initiative is a co-created platform helping SME’s to better manage their treasury http://bit.ly/2hY1X38
Other examples are Banco Bradesco in Brazil, now allowing their customers to manage their accounts out of their Facebook page http://bit.ly/2jhCTR1 or Vietnamese VP Bank teaming up with TIMO a « lifestyle » Fintech venture founded by its Chairman Claude Spiese https://www.linkedin.com/in/claudespiese/, and focusing on generations Y & Z http://bit.ly/2zWTVvM.
Fintechs are panthers, banks are elephants. Elephants are massive, strong and intelligent. Panthers are moving fast, they hunt and jump on their target with no hesitation. In this wild financial industry jungle, elephants will need to move fast. Will they ? Can they ? I’m not sure at all they will. As a young employee of fintech TIMO https://www.linkedin.com/in/phuong-bui-942b21b9/ put it recently when I interviewed her : « A bank was a place where the product was money… Fintechs are businesses who just operate money, these are very different points of view…” A great number of analysts believe that alliances between panthers and elephants is the solution. But merging these so different corporate cultures will be the most difficult challenge.
I think that it’s gonna be tough out there !
Be inspired and Spice Up your strategies
Follow me on my youtube channel