Financial Services and Banking Organizations (#FSBO’s) are ill-prepared to compete effectively in markets dominated by virtualization, social purpose and rapid innovation—they are architected and regulated for an out-of-date consumer narrative.
#FSBO’s are remnants of banking cultures that demanded a customer “come to see us” for services, rather than today’s reality of “how can we serve you.” For decades, traditional #FSBO’s failed to adapt to consumer behaviors and technological advances, which rendered their business models and service approaches obsolete. As a new generation of startups (e.g., FinTech) rise to serve all market segments—affluent, underbanked, Millennials, Gen X & Y—those dogmatic financial brands hiding behind regulators and protectionist barriers will fail. Yet, gratuitous technology deployment won’t singularly solve #FSBO’s core challenges as they wrestle with consumers and regulators.
In Beyond the Technology Traps, Mark and Rick, using their over 60 years of experience, explore the challenges facing #FSBO’s now and in the future, adhering to Mark Twain’s saying of “What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.” For #FSBO’s and their tweeting CEO’s, they need a holistic set of principles and frameworks to adapt—or they will perish.
Mark Twain stated, “What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.” Today, this is where Financial Services and Banking Organizations (#FSBO’s) find themselves. Stated differently and more bluntly, a friend of ours, in reference to #FSBO’s said, “No one is really doing anything that is innovative unless they are ‘forced’ to by the market—it a fear of eminent death.” Why? There are too many traps. Too much can go wrong and end a career.
There are many #FSBO leaders who cling to axioms that have long since expired—unable or unwilling to see the vast changes taking place from consumers to technology to widespread commoditization all within one of the most regulated industries in the world. It should be noted right up front, this is a primary reason why we have shied away from the term “banks” in favor of #FSBO, as to achieve the latter definition, and one which we believe will dominate traditional banking, will demand material changes to business models, methods of delivery, markets, personnel, and of course, technology.
Before the Great Recession of 2008, we knew the breadth and depth of #FSBO staff and partners surrounding all aspects of financial products and services would create a new utopia of leverage and profits. Before the recession, we knew investments would appreciate with little downside risks. Before the recession, we knew the safeness and soundness of the financial systems—global and domestic—were unshakable and would never come into question. Before the recession, we knew many things for sure—but that is what got our stoic #FSBO’s into trouble, and in the process taking the Davos celebrities off a cliff of their own making.
It was a revisiting of this popular Mark Twain (i.e., Samuel Langhorne Clemens) quote that ushered in the spark for this book and became its theme for looking at #FSBO’s and their operations in a world that was no longer of their design. For you see, their design (and operating beliefs) changed little from the mid-1960’s even with progressive adjustments in technology, processes and regulations. What was substantially missed was the consumer changes and attitudes toward #FSBO’s especially as empowerment in purchasing, social interactions and brand voice rose beyond the brick and mortar of the once valued branch.
When this book was just a series of collaborative emails and texts between two people, the idea that an iterative book series could be created about changing #FSBO business models seemed at best, far-fetched. Many said, even a few individuals in their 80’s, that non-fictional textbooks are dead—passed into history like Myspace, the flip phone, Invader Zim, and a single purpose mobile app. In short, it was something no one would ever read.
It appeared, when we started this effort with a Tweeting POTUS in the Oval Office, our success at creating a concise, easy read, deep-dive set of constructive analysis and potential high-level recommendations for #FSBO’s was not advisable. We noted that there were vast numbers of daily articles, short bursts, and non-vetted blogs that filled content needs at the push of a button or a voice request (and now 2-way video) via Alexa.
However, when dealing with highly complex and uncertain regulations along with an evolving customer base, which consistently ranks #FSBO’s at the bottom when compared to other industries, we asked the obvious question, “Why are #FSBO’s, nearly a decade after the Great Recession, not resonating with any of the generational demographics below the aging Baby Boomers?” Indeed, research to answer this subject yielded many more questions surrounding market disintermediation, commoditization of offerings, regulatory challenges, digitization complexity, personnel and operating structures and additional topics summarized in the following Introduction.
We also constructed the content of this book in a collaborative and iterative process—we wrote only after reviewing numerous topical questions, orchestrated and taped conversations, and finally developed visual diagrams and tables to wrap complex points into understandable concepts.
What resulted at the end of this atypical build process was a tightly coupled starting point for a book, which reflects our nearly 60 years of “operating without a net.” You will find the general text conversational, as if two industry personnel were having a working lunch trying to determine what’s next, why is our current state waning, where are the opportunities, and what should we be doing to prepare ourselves and the enterprises for which we work?
Additionally, this book was not designed to be another War and Peace—we worked to create less than 80,000 words. Whereas, many business books create deep dives into topics ranging from the use of cloud computing to settlements to organizational processes, we chose to construct this conversational artifact (which is how we wrote it as a P2P dialogue) to be broad and cohesive. The reason was simple—too often writers and researchers concentrate on details without ever framing the drivers and wide-ranging changes taking place across #FSBO’s.
This is not to say that we don’t provide solutions, or at the very least, the next steps #FSBO’s must take if they hope to evolve and meet the needs of this new market. We take stock of the situation along many operational lines in the first half of the book, and then look for solutions to the identified problems in the second.
And for those readers who crave more, and to demonstrate that what we are saying has efficacy for the emerging #FSBO’s beyond the traditional B&M (brick and mortar), we have made use of “call-out” boxes throughout the chapters to reinforce our points, offer a different perspective, or to provide “A Deeper Dive” into a supporting theme. These callouts can be skipped for a less involved and faster reading of the text, but we feel they offer the best opportunity to touch on the more complex and necessary challenges that organizations will be required to undertake.
It’s worth noting, that while many business, economic and strategy books dive right into the need for technology to transform or morph a #FSBO, we believe that these taxonomies of discrete solutions are just a means to an end. This book is not singularly about technology or the next “killer app” that will make your institution “the best”. There are enough of those to start a library like self-help themes or diet books. This book is not about the latest fads—it is a holistic and lasting series of principles and frameworks that cut across today’s innovations allowing for continual adaptation rather than a flash-in-the-pan or advocating a technology trap.
There are many a failed institution or initiative that have superior technological innovations and market facing benefits—but they failed for lack of an understanding how they served the business, and not how the business served them. It’s not to say we won’t discuss these topics in callout boxes or in the main text itself, but these popular themes—cloud delivery, machine learning, distributed ledger, cryptocurrencies, and even predatory #FSBO’s (i.e., FinTech)—are not the answer, they are part of the solution, not an end state to be reached and a box checked off.
Lastly, at the end of each of the ten chapters, you will find suggested priorities or challenges that most #FSBO’s should consider—think of it as important take-aways. Each of the illustrative priorities, ranked from one to three, are addressed using the “four-V’s” mentioned in the introduction and referenced throughout the chapters. A more complete discussion of the four-V’s can be found in Appendix B. Like the call-out boxes, these lists are provided for those seeking a path-forward and potential scope boundary for various programs-of-work.
By providing a stake-in-the-ground with this book, we set a holistic framework through which #FSBO’s can respond to the marketplace revolution brought forth by regulations, FinTech, private secondary markets, and younger consumer segments more focused on social responsibility than profits or brands. After having spent our entire careers in #FSBO technology, c-level management, and back-office environments, we recognize the need moving forward beyond the technology utopias envisioned by architects and solution providers into a world that will be highly transitory especially when it comes to consumer technology.
To promote a little bit of levity, each section will be preceded with a cartoon about the contents to follow. After all, if we can’t jest about our challenges we just might succumb to the massive amount of movement taking place through all channels of provisioning and delivery. As this initial scene portrays, it will take considerable deliberations and hard work to achieve our strategy shifts as, we are sorry to say, we don’t live in a magical world.
And stating the obvious, but to be clear to you as a reader seeking directions, not all the answers are in this discussion—no matter how much we edit. We have provided the foundations and frameworks to move forward, while avoiding common traps, but the totality of and complexity of the #FSBO world is vast, and no single prescription will cure all ills.
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Mark P. Dangelo is a problem solver with an aptitude for identifying causality and actions. As an advisor, scientist, and innovator, Mark has worked domestically and internationally assisting hundreds of clients understand and profit from emerging operations, technologies, and workforces. He has advised numerous Fortune 500 firms and their executives on post-deal M&A integration efforts, new markets, operational efficiencies, and organizational restructurings.
Mark’s line and c-level experience has been created from a hands-on foundation of business and technology expertise and delivery. His thought leadership, expertise, and corporate brand are recognizable within several industries due to extensive publications, articles, conferences, industry column, and books.
Mark works independently as a SME with a host of international individuals and organizations helping teams understand the relevant application of innovative ideas. He earned a Bachelor of Science in Computer Science and a Master’s in Business.
Mark enjoys traveling, working in global cultures, farming, and scuba diving.