If you’re the CEO of a long-established bank or wealth management firm, you’ve got a tough job to do to drive growth in 2023. You don’t need me to tell you that. But what might surprise you is how much you can learn from challenger banks – the digital disrupters that are just starting up.
As startups know only too well, the pace of change has accelerated for financial institutions. In an increasingly globalized industry, cycles no longer take 10 or 15 years to play out; now disruption is almost continuous. No firm of any kind can stand still for long, as BlackBerry and Blockbuster will testify.
So, for CEOs, there’s no time to waste when it comes to planning your firm’s next move. If you don't act today, it could soon be too late to catch up with competitors. That means thinking like a startup and learning from their examples in the following three ways.
1. Own less technology
When firms started up 15 or 20 years ago, they needed to invest massive amounts of capital (and time) on in-house technology, from large, complex IT systems to costly computer hardware and data centers.
Now, of course, you don’t have to own any of this stuff. Startups can practically set up shop overnight with little more than a credit card, renting prebuilt systems from cloud providers and plugging into the latest APIs.
With the proliferation of managed services, you don’t even have to run many of your own back-office processes. All you need ownership of is your company’s market-leading USP. Outsource the rest – the provision of your hardware, the running of your software and the performance of everyday IT tasks – to tech experts.
2. Trust young talent
Although financial institutions are more diverse workplaces than they used to be, there’s still a lot of room for improvement, especially at board level. Where’s the original thinking you need to keep your firm ahead of the digital disruptors?
As CEO, it’s not necessarily your job to have all the big, new ideas about technology. You might even find fintech a bit daunting. But it’s very much in your power to face your fears and embrace innovation. The answer is to bring in or work more closely with some younger blood – the kind that most startups have running through their veins.
Every organization needs its own disruptors to challenge the status quo and question the ancient systems and processes that could be holding you back, preventing growth and even costing you millions.
Like some smart firms, you could even create your own disruption committees to defy traditional thinking. Sitting alongside the rest of the traditional structures and committees in the bank, these could feed right into your top table.
And once again, you can’t afford to wait – you need those bright sparks on your team right now.
3. Join technology’s cognitive revolution
It goes without saying that every financial institution should now be going digital. But digitalization is really yesterday’s work. To keep moving forward and setting your firm apart, you need to think cognitively.
In the new cognitive revolution, technologies like artificial intelligence and machine learning empower us to get unprecedented value from our data. According to the EU, 80% of industrial data remains unused but could help create €270 billion of extra GDP by 2028. 1
For financial institutions, I believe cognitive technologies will be key to unlocking the next big, bold, disruptive idea. Imagine if you told someone 150 years ago that a metal tube could transport you through the skies from London to India in eight or nine hours. They’d think you were insane.
But that’s exactly the kind of startup-style thinking that you need to apply to your own business. By harnessing the cognitive power of data, you’ll be one step closer to discovering how fintech could create value for your customers and make you the first and best at what you do.
Get fintech for bold ideas
So, you’re ready to act like a startup and inject more innovation into your business plan. But you’re in it for the long haul and need fintech that will stick around, too.
As the world’s largest provider of fintech, FIS® could be your ideal partner in continuous disruption – strong and stable on the one hand, but always looking to change the game with original thinking on the other.
Get in touch now if you think you’re bold enough. Let’s act like startups and disrupt the financial world together.