22 February 2018
Erik Bogaerts

Banking Mashup

Erik Bogaerts - Naqoda

28Posts 106,271Views 16Comments


26 October 2010  |  2220 views  |  0

Swift’s message yesterday morning at the Innovation opening keynote was clear. This week all our problems will be solved. They were referring to banking and IT problems of course, otherwise we’d be here a bit longer. Cloud computing, mobile and smart data are the main topics but through The Long Now initiative, topics such as sustainability are also on the agenda. Two speakers in particular attracted my attention.

Peter Hinssen started off by looking at the new and innovative ways in which we interact with the digital world around us.

“The web is dead” is a now famous quote from Wired magazine not so long ago.
Looking at Internet usage patterns over the last 5 years, it is noticeable that it is gradually displacing time spent in front of the TV. That doesn’t necessarily mean we watch less movies or less news but that we consume it differently. Google TV and Apple TV are good examples of this trend, replacing cable TV as a source of digital content. The variety of devices from laptops to Androids to iPads makes the experience ubiquitous and pervasive.

The web as we knew it is indeed dead, ftp and browser based Internet access is becoming a legacy. Depth of information, rather than quantity of information becomes key in our digital experience. Information needs to be available anywhere, anytime, whether it’s the weather forecast or a bank account balance.

All this is crucial in understanding our customers and their behaviour. The bad news is that customer behaviour changes more quickly than our systems. But the good news is that although customers have zero tolerance for digital failure, they don’t expect perfection. Good is good enough!

So, get out there and ship that app or launch that service.

John Hagel, revealed the findings of an interesting study. In the US, return on assets, a measure of company performance, has reduced over the last 40 years. There are a few possible explanations for this.

Intensifying competition or perhaps evolving competition is the first reason. This is particularly prevalent in financial services where barriers to entry are falling slowly but surely. Regulatory requirements are often seen as an obstacle because we look at our legacy systems and the difficulty of making them compliant. New entrants have the advantage of starting with a state of the art system that doesn’t present those complexities. Whereas you can launch a new independent bank in 12 weeks, in some organizations this is the time it takes to get access to a new dev system and then you haven’t even started yet. New entrants have fewer limitations and break up the value chain of banking, finding or creating a niche of their own.

The second reason is the current transition from a push economy to a pull economy. In a push economy we anticipate demand and plan production accordingly. In a pull economy we don’t have this luxury, we need to be extremely flexible in supply. We need to step back from the burden of process and embrace agility to increase company performance. Chinese companies are seen to be much more agile than US companies in this regard with US companies historically being very process centric.

The third reason is that we lack passion.

Although John is Californian, he doesn’t look like a hippy, so please do read on.

Passion is key to achieving performance. Passionate people embrace the unexpected and enjoy challenges. They express vulnerability and connect to discuss and solve problems. According to Mr Hagel’s statistics, on average 20% of workers are passionate and passion is inversely related to the size of the company.

Will our next financial services companies be WYSIWIG, agile, loosely coupled renaissance institutions?

Anyhow, the message is clear. We need to innovate. Strategic risk and innovation go hand in hand. Innovation should be at the centre of financial services.

But how do you do it?

Innovation is not about launching the next Google. It’s about looking beyond quarterly results pressure, bonuses, preoccupations with regulators and peers and risk adverse attitudes.

It’s about small things.

But that’s not all.

It’s about inventing the future today and shipping it tomorrow. Because if you don’t, Apple will.


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job title Owner
location London
member since 2010
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Erik Bogaerts is the owner and director of Naqoda, a FinTech company providing software solutions to the financial industry.

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