Chris Skinner:

Traditional banks tend to push products through channels to get greater share of wallet and cross sell. Whereas, digital banks start with the customer journey and need, and then build the user experience to be part of a relationship interaction digitally, rather than trying to actually sell them anything.

James Robert Lay:

Greetings and hello. I am James Robert Lay and welcome to the 67th episode of the Banking on Digital Growth podcast. Today’s episode is part of the Exponential Insight series, and I’m excited to welcome Chris Skinner to the show. Chris is an author, speaker, and troublemaker, according to his LinkedIn profile. I like that. And Chris has written 14 books, most recently Doing Digital: Lessons from Leaders. He also writes a daily blog and consults about the future of banking. Hello, Chris, and welcome to the show.

Chris Skinner:

Hi, James. Thanks for inviting me. Great to be here.

James Robert Lay:

Yeah. And I think you mentioned before you do a lot of thinking about the future and when we think about the future, particularly through the lens of financial services, it can be hard to let go of the past. This idea of being built on the cloud natively, it’s operational, it’s mindset. And you share in your book Doing Digital, that banks must create a burning platform to ignite change for transformation, to spark change of transformation. Can you expand on this thinking about creating a burning platform? Is this really about first principles thinking, starting over instead of duct taping something that’s really falling apart, or just trying to hold things together for the old world?

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Chris Skinner:

Well, there’s over 30 lessons in the book that I sort of outlined from the interviews I made over six months with these five big banks. But you start with obviously working out what to do and how to do it and getting a vision around how to digitally transform. And then you have to disturb people and make the organization uncomfortable. This is what Jamie’s doing with this “I’m scared shitless about FinTech.” He’s been doing it for a number of years in fact. I think his first time was about 2014, “Silicon Valley’s coming to eat our lunch.” And there’s been regular mantra from Jamie around effecting change and disturbing people. That’s quite funny, because when you look and track what he’s been saying about Bitcoin, for example, it’s turned around from, “Bitcoin is just a Ponzi scheme for criminals” to, “It’s worth $146,000 by the end of this year and we should invest in it.”

So it’s interesting how things change. And I think the critical thing is it’s great to have a burning platform and say, “We’re all going to die unless we change,” which actually is another thing I heard from two of the banks. You know, if we don’t transform, we die. But you have to then say, “What are we transforming to?” And I use the quote often of Charles Darwin, which is “It’s not the fittest, the fastest, the most intelligent or the strongest who survive. It’s the ones who are most adaptable to change.”

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But the thing is, and my challenge to most banks, is are you adapting to change in the right way?

If you’re delegating digital transformation to a CFO or CTO, CIO, CDO, giving them a budget and a project to implement in a line of business that’s fragmented, you’re really not going to survive. Because you have to digitally transform as a company with a leadership team who are passionate about making the whole company change.

And you really have to adapt, not necessarily in a way that’s rigid. In a way that says, “Well, we have to have a vision of the way forward, so this is where we need to try and get.” It’s not a fixed destination. It’s a continuum of change to make this organization fit the 21st century based on the internet and born on the internet. And that’s the huge challenge for any bank leadership team, because most banks are led by bankers who don’t understand technological requirements.

James Robert Lay:

We’re burning the ships. We’re either going to survive or we’re going to die, and we have to keep moving forward.” But what’s holding bank leadership teams back the most, or maybe a better question is about specifically vision, is what’s blinding them to begin with in the first place?

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Chris Skinner:

Well, I think, and again, going back to Jamie Dimon’s comments. He points at Square, Pay Pal, but also Ant Group and Amazon and says, “You know, these guys are going to be taking all of our business.” And that’s the disturbance, but then you have to then say, “So how are we going to change? And what do we have to change into?” And it’s a metamorphosis. It’s not a reengineering. It’s a complete reinvention, renewal. And I think what blinds them and holds them back is the challenge of doing that is humongous. It’s really not easy.

There’s a couple of great books that I’ve used through my years of talking about this. One is How Do You Make the Elephant Dance? by Lou Gerstner, talking about turning around IBM in the 1990s. But more recently Satya Nadella’s book about Microsoft. When you look at Microsoft and the turn around there, you go,

“That’s amazing that you can take a company that’s stubborn, saturated, sinking, and suddenly make it nimble and quick and turn around.”

How did they do that? It’s really about recognizing the cultural needs. Digital transformation has nothing to do with technology. It’s about people. It’s about making people understand that they have a voice, and they have an ability to enable change. They’re not just being told what to do, but they can tell us what to do.

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