Is digital banking dead?

Posted on June 7, 2018 at 3:00 PM by Mike Horrocks

This week I had the chance to speak at American Banker’s Digital Banking 2018 conference.  It was a great collection of bankers, vendors, and thought leaders all defining and blazing the trail for digital banking.  I was really impressed by three of the general session speakers:  Brett King, founder of Moven, the alternative banking solution; Catherine Bessant, Chief Operations and Technology Officer at Bank of America; and Rizwan Khalfan, EVP and Chief Digital and Payments Officer at TD Bank Group.  While most likely not the intent of these speakers, I could not get out of my mind the thought that even though we are all here to talk about digital banking, at the end of the day could digital banking be dead before it even got really started?  Let me explain…

The bank of the future is not a bank

Brett King made a maybe-not-so-bold prediction that the largest bank in 2030 will not be a bank at all, but rather a technology company that has figured how to store, transfer, and credit value to make it so that you and I can have rich (in a holistic sense) and meaningful lives.  This makes sense to me when I look at the small changes in my own life with things that are so common now.  For example, the other day I was making something for family dinner and I used the last of the saffron spice (I know, shocker…how does one run out of saffron?).  However, thanks to my handy Amazon Echo, I was able to tell Alexa to add it to my shopping list, and it will show up without me having to even lift a finger.   That will be the banking experience too, in 2030. 

The banking industry will be outpaced by innovation

The first robots to change how cars are built were introduced to the production line in 1961 at General Motors.  At that time, they were just prototypes that would do a little spot welding at best. But, the point is that they never went away.  Innovation continued, more sophisticated robots emerged, and an entire industry was transformed.  In banking we have introduced mobile, AI, bots (oh my) and all things FinTech—and most of that has happened in fewer than five years.  

Now, you can look at this from a point of fear, or opportunity.  Even at Bank of America, the CEO and the CTO are at odds—with the CEO saying we are giving too much away to automation, while the CTO sees it as the chance to free human time to work on other tasks.  I am going to side, however, with Bessant and say that you need to look at it from a hopeful perspective—consider what imagining can be done now that we have made some human thought cycles available for creativity.  I love how Bessant sees 4,500 “inventors” rather than coders and developers.

Do not be afraid to innovate—just help bring others along if you can.

The banker of tomorrow is not a banker

At Baker Hill’s Prosper just a month ago, I had the chance to present around FinTech strategies and approaches with Elizabeth Crawford from Emprise Bank.  One of the key points made by Emprise is that you have to stop thinking like a bank when it comes to your interaction with consumers.  I would take that one step further and say stop even hiring bankers and look for entrepreneurs and innovators, especially in your IT departments.  Take the HR challenge of bringing in someone who does not know there is a box to even think outside of to begin with.  Go crazy with your ideas and how they could be implemented to radically change your bank or credit union. 

So back to my question…is digital banking dead? Thankfully, the innovation and creativity that is driving what we   call “banking” or “digital banking” is not dead – in fact it is alive and doing very well.  However, maybe digital banking itself just needs to be renamed to something like “digital life empowering” or “digitally making my life easier” or something like that...we will figure out the naming.  In the meantime, do not act like a bank.  Remember innovation is key, and do something very different and apply it to your job today at the bank—you will be glad you did. 

Mike Horrocks

Written by Mike Horrocks

With more than 25 years of experience in the financial services industry, Mike Horrocks possesses a unique and extensive blend of financial expertise, technology skills, process redesign abilities and solution management experience. Horrocks’ background enables him to create go-to-market strategies for new solutions, help clients convert strategies into revenue generating initiatives and forecast market direction. As the Vice-President of Marketing at Baker Hill, Horrocks’ responsibilities include the identification and development of new market opportunities in the business of lending, risk management, and analytics for financial institutions. Mike holds a MBA both in International Finance and Venture Technology Management from Indiana University and a B.S in International Finance from Brigham Young University. Before joining Baker Hill, he held executive positions within several other organizations, including Experian, Profit Technologies, SAIC, Broadway and Seymour (FIS), Zions First National Bank and Zions Data Corporation. Horrocks is a member of many associations including the Risk Management Association and Bankers Without Borders. In his free time, he enjoys traveling internationally with his wife and five children.

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