February 26, 2016

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Waiting for the ‘UBER movement’

I think it is rather chic now to hear about the impending 'UBER movement' in Banking and Financial Services. How we do not need banks and how the FinTech upstarts will take over the world. I am waiting patiently for the 'UBER movement' in banking to occur. Yes, still waiting.

From my vantage point, I see a lot of FinTech startups innovating and creating new opportunities for change. I get it. But will these start-ups 'own' the customer? Is a new payment platform enough to ensnare an entire banking customer relationship? I think not.

What is it about UBER that sets it apart? Where is the innovation? Did they create a whole new industry? For one, they certainly turned the cab business upside-down. They used technology such as mobile applications and GPS to differentiate. But is a digital bank, such as Ally, all that different from its brick and mortar counterparts? I believe they are they still offering basically the same products as their brick and mortar siblings, just with different methods of delivery.

I believe innovation in banking can and will come from within. Banks know that the old delivery model of 'branch banking' is rather dead. Especially as we move away from paper (checks and cash) to electronic forms of payment. So what to do? Re-invest in the physical branch… probably not.

Thinking outside the box requires changing the paradigm. Banks are not notoriously known for new and different thinking. I think the last big innovation in banking was the ATM, and that was long ago. I challenge the old guard to think anew. How can you capture the imagination of your customers – your loyal and sticky customers – so that they want to remain loyal to you?

Technology alone is not enough and even newer ways of delivering financial technology are simply not enough. It is time to break down the old business model, outdated processes, and fragmented silos, and re-connect with your connected customer base. The world awaits you.