Banks Won’t Eat Challengers’ Dog Food But That’s Not Who’s Coming For Their Lunch

<Reproduced with kind permission from Forbes>

The Bubble of Banking

“Get out of the building” was such trendy advice a few years ago and now everyone is barricaded in their building.

Being told to look at other industries elicited many a gratuitous Silicon Valley excursions from bankers around the world which were invariably sprung on by lofty aspirations of doing the same things as the champions only to be drowned by seemingly reassuring remarks on how that simply doesn’t apply to banking. 

These days those trips are rarer and rarer which is a blessing and a curse.

Is it maybe that we don’t get out so that we don’t see how far behind we are digital user experience wise?

What’s most concerning is that traditional banks are not the only ones inside the bubble anymore but challengers are heading that was as well.

It’s nothing short of tragic to see some of them having but moments ago left their privileged first-principles design position and having now gotten utterly stuck in whatever they produced, often so blinded by the reality of day-to-day operations that instead of their current offering being a first pit stop at the end of a design sprint it becomes their main offering.

There is no doubt that it’s understandable – for challengers day-to-day doesn’t only involve running a bank which is what incumbents cite doing with such sacrifice but running a small business that needs to show its worth under extreme scrutiny as well. It’s tough.

A tale of two different tragedies – the challengers having to make a start-up thrive and the bankers having to budge an almost impenetrable mass of legacy tech and legacy culture. None an enviable position. None poised to build any lasting wins for the consumer.

Where are my MoneyMomentsTM

No one wanted challengers in the UK to succeed more than me. Over the years I’ve penned a couple of open letters which aimed to keep the snark level low and the constructive advice level high. Granted, a lofty goal for me, but my delivery shouldn’t have obscured the main message a plea for them to build solid technology pillars, take aggregation seriously, buy or build extremely capable categorization and data capabilities and above all, forget about banking products as they know them and design from scratch for addictive money moments.

Needless to say and not to burst the bubble of our newly enthused American friends who celebrate the announced imminent import of some of those propositions this week, none of that happened.

If you unpack most challengers today, they are rapidly building legacy of their own both in technology and in the way they are building the organization, having skipped steps and cut corners in their hurry to put out an app with some pleasing design accompanied by the best looking card they can think of and greater a sin still, with the exception of the unrealised promise of the budding challengers who aspire to become platforms, gave us precisely the same thing high street banks did.

Not a MoneyMoment in sight. How do l know they aren’t building any? Well ask yourself, with all the permissions every app ever asks for, why hasn’t any challenger asked to read your health data or at least your Calendar or your TripIt information? How are they to build integrated, contextual experienced when their transactional data is largely untouched and unaugmented with meaning and their data from other sources inexistent?

They aren’t. Truth is it’s not necessarily more likely that they will start doing so any sooner than the next NatWest app update. 

License to snooze

It’s a lot grimmer for the success of the challengers than we have collectively hoped for in the industry with advocates faith diminishing and mass adoption lacking but does that mean that incumbents should breathe a sigh of relief and carry on with JP Nicols’ trademarked “innovation theaters” and ever stronger “business prevention” departments?

Only if they’re ready to be out of the game because the extinction threat doesn’t come from colorful cards and incrementally better digital apps but entirely new ways of interacting with finances that will insidiously and mercifully insert themselves in our every day digital lives through buying behaviour and relevant advice and the guys who can and will provide this only have to click to make it happen.

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