Leadership

The Four People Who Ruin Innovation

Innovation is fun. Except when these types are around. How many do you know?

The Hypemaster

The Hypemaster is, well… a master of hype. Everything they’re working on is amazing, and you must absolutely drop everything and check it out. Right now! “Hey we’re getting ready to launch Hypemaster.io, check it out and let me know what you think!”

I love meeting new people and seeing new ideas, even though I usually don’t have a lot of free time to look at a stranger’s project and give them a bunch of free advice. But I try to be helpful, so sometimes I do it, if the approach is right.

The Hypemaster doesn’t respect your time or your own commitments, and they really don’t even want your advice anyway. They just want you to promote their link on social media, or worse, ruin your friendships by introducing them to other people. Their project descriptions are stuffed with enough buzzwords to make Dilbert’s pointy headed boss jealous. “We are radically disrupting this vertical with a full stack digitized approach to the blockchain, with fully-configurable architecture and a lightweight contextualized interface”.

Natural Habitat: Startup Conferences, Conference Apps, Twitter DMs, LinkedIn InMails

The Innovation Snob

Nothing is cutting edge enough for the innovation snob. 3D Virtual Reality? Yawn. It’s been done already. Self-driving car? The Innovation Snobs claims to have been into them 10 years ago, but it’s too mainstream for them to bother with now. They think Elon Musk’s rockets are too similar to what NASA did in the 1960’s.

Continuous improvement and incremental innovation are an important part of keeping a company growing, but they are nothing but eye-rolling material for the Innovation Snob. Solving real problems that paying customers care about is the true heart of innovation, but the Innovation Snob only wants to see something they have never seen before. Preferably on a touchable hologram emanating from a smartphone that hasn’t been released yet.

They also think they are the only ones entitled to an opinion. Everyone else is a pundit, armchair quarterback or wannabe, they’re the real deal, damn it.

Natural Habitat: The Bar after the Conference, Finovate Twitter Feed, Facebook Comments.

The Disruption Denier

The Disruption Denier is the 180-degree polar opposite of the Hypemaster. NOTHING is impressive or impactful to them. All of the good ideas are already taken. Anyone with a new idea is simply a charlatan trying to separate you from your hard-earned money. They’ve been there, done it, got the T-shirt, and knew better the whole time. They also know far better than than you now that your new idea will never work. They’ve tried it before. Didn’t work then, won’t work now.

Disruption Deniers think they alone have figured out how the world really works, and that the current state of affairs is permanent and unchangeable. Worse, they sometimes are even convinced that some previous era was actually the ideal situation, and that most progress made since then is regrettable.

Sometimes this perspective comes from a comfortable perch built from doing something that did indeed work just fine in the past. Usually though, it really just comes from a dark and bitter place where they just don’t want to accept their own failures, so it makes them feel better to lash out at others, usually through drive-by assaults in the comments section.

Natural Habitat: Mid-Level Management, Golf Courses, LinkedIn Group Comments on Others’ Posts

The Chameleon

This person can be hard to spot. They might seem at first to be a Hypemaster, singing the praises of the hottest piece of technology, especially if it isn’t exactly brand new. At other times, they may appear to be a Disruption Denier, clucking at some previous market darling’s fall from grace. They gyrate wildly from pro to con, and from fanatic to critic.

They were the first to tell you how excited they were about the Apple watch when it was announced; but now that their friend is less than enamored, they tell everyone how much it sucks. All through secondhand knowledge, because they won’t buy their own until Version 5 comes out.

The chameleon has an incredible ability to blend in to its immediate surroundings; sensing the environment around him and adapting to it quickly and without notice. Apparently the price for this superpower is a lack of original thought and reasoning ability. They do, however, possess 20/20 hindsight.

Natural Habitat: Company Lunchrooms, Cable News, Facebook, Twitter (main feed)

Everyone around you is either helping you get to where you are trying to go, or they are not. These people definitely are not. You can’t always pick your boss, your coworkers, or a lot of the other people you come across daily, but your innovation efforts will improve if you get rid of these people.

And you’ll have a lot more fun.

5 New Years Resolutions for Bank Innovators

Here are some New Year resolutions for the growing group of bankers who are adding “innovation” to their do-to list in 2016. Getting these right will greatly improve your chances for success in the new year.

1) Define Your Innovation Goals

So, what do you want to get out of your innovation program?

Incremental improvements or radical disruption?
Catching up to competitors or breaking new ground?
Renewing existing capabilities or creating new ones?
Updating your offerings or launching new products?
Pushing more ideas from the top down or bubbling more from the bottom up?
A focused challenge or a broader initiative across business lines?

Define your innovation goals and align your team and your priorities accordingly.

2) Take Your Innovation Program Seriously…

Hopefully you are doing this because you recognize that the world is changing, and that companies in every industry have to change and adapt with it– to retain your current customers, to acquire new ones, to generate new revenues, to stay relevant.

Innovation shouldn’t be the flavor of the month, or something that someone from your executive committee wrote down at the “strategic offsite” as a box to check off for the next board meeting. It should be part of the way you do business. Part of your DNA.

Put the right people in charge. This isn’t the place to park your retiring executive or the place to create some resumé padding for your up and comers. Find the smart and curious people who challenge the status quo. Get some outside help. There’s a pretty good chance that starting an innovation program is significantly different than anything you have managed before, and many of the instincts and experiences that have led to your current successes might actually get in the way.

3) …But Not Too Seriously

Create a sandbox where people are free to experiment and test and try new things. Don’t force your normal ROI metrics on an innovation project that is really unique, disruptive or conceptual. If you do, you’ll end up watering it down to something much more incremental. That might be OK, but you also might miss out on something that could really differentiate you from your competitors.

Truly transformational ideas take a while to build and test and get traction, don’t throw all of your resources into one massive project. Start with some smaller projects where you don’t have to be afraid of making mistakes.

4) Focus on Learning

Get out of the office and learn from what others are doing. Meet entrepreneurs who are coming up with new solutions that you might be able to use– many of them want to partner. Look at new ideas from different industries and think about how they might be applied. Read more!

We have a tendency in the banking industry to develop new ideas inside our own four walls, validated only by our own people, inside our own echo chambers.

5) Focus on the Customer

Innovation isn’t necessarily about cool technology. The most successful ideas are those that solve a real pain point or create an important gain for a customer.

Don’t be afraid to get customers involved early. Talk to them. Even better, watch what they do. What work-arounds have they created to fill gaps between existing offerings? What products or services are they using from your competitors?

Focus your innovation efforts on things that matter to your customers.

Why Collaboration Matters in Banking

I spent most of this week at Money 20/20 in Las Vegas. The show continues to grow— 10,000+ attendees this year— and it continues to be a magnet for banking and payment executives, merchants, fintech entrepreneurs, investors, analysts and plenty of commentariat on all such things.

With more than 550 (!) speakers at Money 20/20, the content was uneven, as one might expect. For every thought-provoking keynote like that of Patrick Collison, CEO & Co-Founder of Stripe, there were plenty of ho-hum recitations of corporate press releases.

“Most People are building cars (FinTech products). We are building Roads.”

– Patrick Collison, via Sam Maule

And, for every standing-room only panel session like this one, there were droves of drones, droning on.

Standing room only with future of payments panel with Facebook, PayPal, Western Union, AliPay, Vantiv #money2020 pic.twitter.com/D0GYjbecSs

— Bradley Leimer (@leimer) October 26, 2015

Merchant and Issuer Collaboration

Following Capital One, Chase announced its own mobile wallet app. Chase’s announcement marks their efforts to build an early bridge between the deeply divided camps of merchants and card issuers with the mobile payment solution Chase Pay.

Chase Pay, which will work on “virtually all phones”, enjoys the backing of the merchant consortium MCX, which includes some of the largest retailers in the world, including Walmart, Target and Best Buy, but most early assessments are less than enthusiastic about the customer experience, centered around QR codes. We’ll keep an eye on that, but it does bring one of the largest credit card issuers and payment processors in line with a huge number of merchant customers, and it was hard for me to see how MCX’s CurrentC was going to get traction with consumers.

Collaboration at All Hours

But great conversations were happening everywhere, and not just on stage — in the hallways, in the restaurants and bars, at the casino tables, at private meetings, and at the parties. At Money 20/20, there are always the parties…

Money 20/20 is where kids who were home-bound homework-slaving nerds go to feel like the cast of Entourage.

“Hey, are you going to the Wyclef Jean party at the Tao Beach Pool?”

“Right now I’ve got to drive some Ferraris and Lamborghinis around, and then I have a dinner at the Eiffel Tower restaurant, but I’ll try to swing by later if I can.”

Wyclef Jean at #money2020. Because Conference. pic.twitter.com/BK08H94dpA

— Julie Schicktanz (@JulieSchicktanz) October 27, 2015

Had an amazing event last night with @MXenabled. Everyone was able to drive Ferrari’s and Lamborghini’s. #Money2020 pic.twitter.com/3Lify426aa

— Matt West ️ (@Matt__West) October 27, 2015

Bank and Fintech Collaboration

As usual though, I spent most of my time looking at how financial institutions are innovating and how they are collaborating with fintechs to innovate. John Waupsh, Chief Innovation Officer at Kasasa by BancVue captured a great quote by Marc Lien, Director of Innovation & Digital Development at Lloyds Banking Group:

#money2020 – Lloyds: “Winning fintechs will realize that to scale, they need to partner w/ banks & winning banks will partner w FinTech”

— John Waupsh (@waupsh) October 28, 2015

Lien was speaking on a panel which also included Phil Gilligan, Managing Director, Head of GTO Innovation at Deutsche Bank and Niki Manby, Chief Operating Officer at Citi Ventures. The panel was moderated by Chris Skinner and was titled Responding to Disruption: Are Banks Meeting the Challenge of New Competitors & Changing Customer Expectations?

As anyone who has read or heard me before knows, my answer to the rhetorical question posed in the Title is “Only a few”.

Leaders, Learners and Laggards

We continue to see a power curve distribution in the industry of Leaders, Learners and Laggards. Most are laggards. They think that innovation is for someone else, and they are smart by being “fast followers”. It might be smart, if they put more emphasis on “fast” instead of “follower”.

There is a small and growing group of learners— those that know they need to innovate, and have pockets of innovation, but also know they need to do more.

Only a relatively few financial institutions worldwide can be seen as leaders in innovation. These are those organizations that have both broad and deep innovation efforts, from the incremental to the radical, and they seek to embed innovation throughout the organization. They also connect and collaborate across a broad ecosystem that includes customers, vendors, partners and even potential competitors.

Collaboration at Capital One

One of the innovative financial institutions I have long admired is Capital One. From the company’s philosophy that it is a data company that just happens to be in the banking business, to the work of their three internal innovation labs, to their acquisition of design studio Adaptive Path and the hiring of Daniel Makoski from Google as its first Vice President of design, the company has a knack for being a leader, not a follower.

So I was happy to spend some time this week working in partnership with Capital One Growth Ventures, the company’s one-year old corporate venture capital arm.

On Tuesday afternoon I moderated a panel discussion with Jaidev Shergill and Lauren Connolley from their team. Both Jaidev and Lauren are ex-bankers turned entrepreneurs turned VCs, so they have a broad perspective on the fintech space.

Startups Need Relationships and Contacts

We talked about the unique value a corporate venture capital firm can provide to startups as a strategic investor, as opposed to a pure financial investor. Shergill pointed to the firm’s recent survey of tech entrepreneurs which showed that the top two things they were looking for from their investors were commercial relationships (69.5%) and useful connections (61.4%).

That’s easy for me to believe. I know from first hand experience as an advisor to early stage companies that it’s difficult to sell to banks. Startups can create products from scratch faster than most banks can assemble a meeting of the various constituents.

I asked Connolley if Capital One needed to be a lead customer for their investments, or if they were OK with the companies selling to other banks too. Her response:

“Sometimes we are customer number one, sometimes we are customer number two or three or ten. As long as we all have appropriate privacy measures in place, we’re fine with that. We are especially interested in companies that build platforms that can be used in multiple ways”.

Lauren Connolley, Capital One Growth Ventures

Shergill also talked about his group’s ability to add value from the early stages of product/market fit to later challenges of testing and validating new use cases and achieving scale rapidly. He pointed to their investment in Chain Inc., a startup that builds and deploys blockchain networks to facilitate seamless transfer of digital assets.

“We provide a really unique opportunity to test innovative technologies, and we can connect the companies we invest in to people in multiple business lines to test any number of use cases”

Jaidev Shergill, Capital One Growth Ventures

It’s one thing to add a feature to your existing products and call it innovation, it’s quite another to be willing to disrupt yourself and even invest in the disruptors.

You can learn more about Capital One Growth Ventures at growthventures.capitalone.com, or contact them by email at COFventures@capitalone.com. The firm focuses primarily in the areas of Big Data Technologies, Payments & Commerce, Security & Authentication, and Small Business.

*Thanks to Capital One for sponsoring portions of this post, but all opinions expressed are mine, all mine.

In Search of Competitive Advantage

Next week I’ll be in Las Vegas for Money 20/20 the huge payments and financial services innovation conference, and as always I’ll be on the lookout not only for cool ideas and technology, but in particular those that can bring a competitive advantage for financial institutions.

There will be a ton of content on EMV, mobile and contactless payment developments, POS and transaction data, authentication and security, and of course, there will be lots of blockchain. Blockchain is the new “E-Business”, it will make you better, faster, stronger, smarter and better looking. I’m sure someone will try to tell me how much better my dining experience could be if the menu was on the blockchain.

Don’t get me wrong, I think blockchain technology holds incredible promise for many areas in financial services, and some truly brilliant people are doing amazing work. We’re going to see some real breakthroughs for the groups that solving problems that people (and banks) care about solving.

At the same time, what are we now— 15 years into talking about “omnichannel” experience? And probably going on 5 years into the backlash that we shouldn’t be thinking about channels at all (or at least not digital versus face to face). Many— if not most— financial institutions are still struggling to close the widening gap between what their customers expect and what they are able to deliver, as I wrote about recently (Bridging the Customer Experience Gap).

No Shortage of Ideas

It’s not the lack of technology that holds them back. Nor is it lack of great ideas.

But which ideas have been on the hype curve too long and which ones are ready for prime time? Why are some ideas viral with certain groups of people and unheard of in others? My colleagues and I have been spending a lot of time working on how ideas and people come together and how the most innovative organizations in the world embrace multiple approaches in discovering and implementing new ideas. (Read more: Innovation is More than the Next Big Idea)

I continue to believe that very few banks will be product innovation leaders, so the battle for most will be trying to become truly customer intimate after spending so many years investing in scale and scope and standardization and efficiency— the marks of infrastructure management. (Another topic I’ve been writing about for some time now: How Banks Can Compete in the Future)

So I’ll be looking for examples of innovative product ideas that can partner well with banks’ infrastructures to create that elusive customer intimacy, and bridge that customer experience gap.

Investing for Impact

Next week I will also be working in partnership with Capital One to take a deeper dive into how they approach innovation. The bank runs three innovation labs, and they work on both the day-to-day incremental improvements into more transformative innovation, some of which come from acquisitions they have made along the way. I’ve shared this cool video on YouTube about their labs with my students at the Pacific Coast Banking School.

One of the key acquisitions was that of the big data analytics company Bundle in 2012, which ultimately resulted in Bundle founder and CEO Jaidev Shergill becoming Managing Partner for Capital One Growth Ventures.

On Tuesday October 27 from 3:30 to 4:30 I am moderating a discussion with Jaidev and his colleague Lauren Connelley at the Capital One Booth at the Venetian during Money 20/20. I encourage you to join us if you’re at the event, but I’ll report highlights here.

I’ll be talking with Jaidev and Lauren about their approach to investing and technology companies and how their strategic approach differs from a pure financial investor. A lot of the early stage companies I’ve worked with have struggled to gain insights directly from the banks they’re tying to sell to and partner with, and not all of their funding sources have been able to provide much help either.

I encourage you to join in the conversation.

Learn more about Capital One Growth Ventures here: growthventures.capitalone.com

Bridging the Customer Experience Gap

The prevailing view of most financial industry leaders over the past decade has been that internal innovation was optional at best, and probably harmful to the way they’ve been used to doing things for so long. Meanwhile innovation bloomed on the edges and outside of the industry, bringing a surge in customer adoption in fintech, which has brought a flood of investor equity in turn. Financial leaders are finally starting to pay attention.

Sort of.

It’s certainly not a moment too soon, as today’s consumers who live their life in a world defined by the customized and engaging customer experiences of Apple, Uber, Google, Netflix, Starbucks, Amazon and others sense a major disconnect when interacting with their financial institution. Back to the future, indeed.

I spent last week in Singapore at the massive global banking conference Sibos, and while I was surprised at the number of bankers who insisted on wearing suits and ties at a luxury resort in the tropical heat and humidity, I was encouraged by the throngs of suits who overwhelmed the Innotribe sessions.

Innotribe has been the embedded rebel camp at Sibos since 2009, but this year a large swarm of new faces joined the familiar bunch of casually-clad denizens, which included a veritable who’s who of fintech entrepreneurs, innovators and influencers far too numerous to mention here (check Twitter).

From Big Data to Value Data

One of the Innotribe sessions showed how artificial intelligence, crowd-intelligence, graph intelligence and human intelligence are all converging, and how that convergence can be harnessed to create truly personalized and relevant customer experiences.

Looking into the U.S. Consumer Financial Protection Bureau consumer complaint database on banking services, there are some interesting geographic differences in the data that could be used to paint a vivid picture of evolving customer wants and needs.

There is a treasure trove of information available there and it is amazing that we continue to talk to senior banking leaders who have never spent time with the data. It seems that many consider it the domain of the compliance department, or maybe customer service, but not enough are using it to help tailor their products and services to improve the customer experience.

There is an overwhelming amount of data out there— big data, little data, structured data, unstructured data, transactional data, social data— but the key is making sense of it in the context of your business plans and in the markets in which you are operating. That’s what we call Value Data.

Fintech Becoming Mainstream?

Besides all the new faces at the Innotribe sessions, I’ve experienced similar new interest in my own talks on the rise of fintech and the need for more innovation in banking. I attended a banking industry conference a couple years where I experienced mostly ignorance and indifference to the topic, so I stopped attending. This year the group’s new CEO invited me to keynote in a featured slot on their main stage.

Earlier this year I was also invited to teach the first class ever on innovation and fintech at the Pacific Coast Banking School at the University of Washington. The class was fully booked in short order, so a second section was offered and it too was fully booked. The students were largely unaware of many fintech developments over the past few years, but they were deeply engaged in learning more and figuring out how to apply the lessons in their own banks.

This widening interest is not just in my imagination. Look at the trend line of Google searches on the topic “Fintech”:

Next week I’ll join 10,000 of my closest friends in Las Vegas for Money 20/20, where fintech and innovation in financial services are certainly not new words. I will also be working in partnership with Capital One and Capital One Growth Ventures, to take an inside look at how they’re investing in fintech and innovation in banking. Stay tuned for more details on that.

The good news for now is that more and more banking leaders are recognizing that the world is changing around them, the bad news is that most are not prepared to move quickly enough to close the ever-widening gap.

As General Eric Shinsecki, former Chief of Staff of the U.S. Army said, “If you don’t like change, you’re going to like irrelevance even less.”

Innovation is More than the Next Big Idea

During the last 15 years, 47 fintech companies grew from startups to “unicorns” (valued at $1 billion or greater), with another 38 companies quickly approaching that level, as Jim Bruene posted to the Finovate blog. This has caught the attention of investors, who poured $12 billion of capital into the fintech space last year alone. Some of the more savvy bank CEOs are starting to pay attention too, as evidenced by JP Morgan Chase CEO Jamie Dimon’s pronouncement that “Silicon Valley is coming” in his annual letter to shareholders this Spring.

Mindless Myopia

Plenty of leaders still have their heads buried in the sand, though. I speak a lot about the need for innovation at financial services conferences, and I often ask for a show of hands to gauge the awareness of the executives present about some of the disruptive fintech companies changing their industry. The number of hands in the air is usually dwarfed by the numbered of confused looks and hastily scribbling pens.

Maybe they should spend more time on what’s happening outside and on the edges of their industry and less time worrying about the hierarchy of corporate dress codes. Except cool socks. Nothing wrong with cool socks.

Jim Marous at The Financial Brand reported on research by Adaptive Lab that showed similar results in the UK, leading to banks being “displaced, diminished and disintermediated”.

Awareness_of_startups_in_executive_at_banks_b-565x518

This myopia begins with an ignorance that is unnecessary, and often willful. Most of these companies are hiding in plain sight, but it is more comfortable to keep doing what you’ve already done. Despite popular belief, no industry is too big, too entrenched, or too protected by regulations to be disrupted. It’s too late, banking is already being disrupted.

This digital disruption is not just happening in financial services. During that same period since 2000, 52% of the Fortune 500 companies listed in 2000 have already gone away through M&A or bankruptcy, according to a recent report by the Altimeter Group and Capgemini.

Innovation to the Rescue?

The best way to predict the future is to create it; and other industries, especially those driven by technology, make regular investments in research and development to stay ahead of the curve. This has been virtually unheard of in financial services until the last few years, when the more forward-looking organizations began to establish innovation teams and programs.

Organizations that are innovation leaders treat ideas like assets— they actively acquire them, protect them, grow them, manage them in a portfolio to optimize risk and return, and monetize them. Innovation laggards treat ideas like liabilities— they avoid them when at all possible, and the activities they spend the most time on are geared to reduce their numbers and look for ways to get rid of them.

More importantly, the most innovative companies know that innovation is about more than the next big idea.

An idea itself is worthless.

An idea shared, built, tested, and iterated upon begins to gain value as it becomes infused with human potential.

Then, the real hard work begins.

Powerful corporate antibodies efficiently seek and destroy new ideas before they get too much traction. Budget guardians ensure that no funding is diverted from existing products and programs, not matter how long in the tooth they may be. The larger the company, the longer it has been around, and the more mature its industry, the larger and louder this group becomes. These Traditionalists think they already know what works and what doesn’t.

Until it doesn’t work anymore.

The companies that thrive during times of disruption make the tough decisions to redirect resources from legacy programs to new ideas that might help them invent their own future.

They know that innovation is more than just the next big idea.

It’s Too Late, Banking Is Already Being Disrupted

Bankers may be taking undue solace in Chris Skinner’s April 10 American Banker BankThink post, “Like Airlines and Pharma, Banking’s Too Big to Disrupt.” I was party to the specific round of sparring he cites in his article over whether financial technology startups will overthrow the banking industry. And although I agree with many of Mr. Skinner’s points, he discusses several ideas that merit further exploration.

First is the meaning of the word “disruption.” To say that banking is being disrupted does not necessarily mean that the entire industry and all of its current participants will cease to exist. Disruptive innovation simply changes the game by creating new markets and new relationships between organizations and individuals, and that is already happening.

Hollow Inspiration

A long and storied history does little to protect incumbents against truly disruptive forces. The railroad industry, for example, is dominated by century-old players. Its high cost barriers to entry were further bolstered by tariffs, regional monopolies and political protection. But it exists today as a mere shadow of its grand past, largely because new forms of transportation decreased demand for railroad service.

One of those disruptors was the airline industry, which does offer a better comparison for banking than books or music, as Skinner points out. But the comparison is hardly an encouraging one. Airlines have low single-digit profit margins, generate returns below the cost of capital, and are highly susceptible to economic cycles. The result has been a string of painful bankruptcy reorganizations, layoffs and mergers throughout the industry.

Skinner also dismisses the idea that “some geek in a bedroom” could create the Uber of banking. But back in the 1980s, IBM probably thought there was no way some geek could eliminate their stronghold on personal computers. Yet that’s exactly what happened. Michael Dell famously started Dell Computer from his college dorm room. He became the youngest chief executive of a Fortune 500 company just eight years later. A dozen years after that, IBM got out of the PC business, selling it to Lenovo. And as the waves of disruption continued, Dell was later knocked off its own throne by Apple and other companies.

Banking, like airlines and railroads, is a mature industry. Computers and mobile handsets are too at this point. All entrenched players in these industries face battles for profit margins and further consolidation. But disruptive innovation makes those battles even harder.

Advance Warning is Not Protection

The incumbents argue that their longstanding positions will give them sufficient time to adapt and react to any disruption. But advance warning seldom provides disrupted incumbents with protection.

Kodak was not unaware of digital photography, but the company was unable to shift its legacy culture and operations quickly enough.

By the time Apple released the first iPhone in 2007 Steve Jobs had long progressed from the geek in a bedroom stage, but they seemed at the time just as unlikely to unseat entrenched industry leaders such as Nokia, Motorola and Blackberry

The banking industry as a whole will continue to exist. But how many individual banks will be able to make the necessary changes to stay relevant in a rapidly changing market? Not even the most disruptive of fintech companies is likely to single-handedly topple the entrenched mega-bank infrastructure, but these disruptions are slowly killing banks. At least some of them.

As I have written before, failure to innovate is never listed as the cause of death for banks. It’s just an underlying condition that observers discover in the post-mortem.

Time for Transformation

It’s true that good companies can and will survive. As Mr. Skinner pointed out, “some startups will eat some of the banks’ lunch,” while others will adapt. But rather than sitting back with a collective sigh of relief, bankers would do well to heed the advice that Mr. Skinner has written about extensively in many of his other articles and books: do the hard work to transform old infrastructures, cultures and business models.

It’s too late to argue that banking is too big to disrupt. The disruption is already happening.

_________________________

A version of this article first appeared in American Banker’s BankThink