The convergence of competition, rapidly advancing technology, changes in customer expectations and behavior, as well as regulations is significantly impacting banking and finance. With social media, news feeds, email news letters, conferences, podcasts, video feeds, and more, there is no shortage of information about what is going on in FinTech today. The challenge is finding a place to begin to sift through the noise and develop a foundation for understanding what is driving all of this change.
Here are three books I found to be valuable and recommend as a starting point for your journey of discovery.
1. Bye Bye Banks?: How Retail Banks are Being Displaced, Diminished and Disintermediated by Tech Startups and What They Can Do to Survive – James Haycock, Shane Richmond
This book takes about two hours to read and is a good way to quickly catch up on the rapid pace of innovation in banking & finance. An interesting take on reinvention in response to rapid change, the author introduces the concept of "the Beta Bank." According to the book, "A Beta Bank is a standalone organisation with a separate leadership HQ. A fresh start, offering the opportunity to rethink from the ground up." This author proposes that incumbents might consider a new business model designed for the future rather than trying to adapt a legacy organization stuck in the past. Of course, a radical approach like that is not for everyone, but it is an interesting concept to imagine.
2. Breaking Banks: The Innovators, Rogues, and Strategists Rebooting Banking, Brett King.
One of my favorite passages from this book is the discussion on the importance of insightful use of data to revolutionize the customer experience.
3. Digital Bank: Strategies to Launch or Become a Digital Bank by Chris Skinner
Here are a few key points that stuck with me from this read:
- Customer Experience is KEY: Customers have new expectations and they don't care about your internal silos. They want the bank or financial institution to, "Know me, bring the whole organization to help me, advise and guide me, and make my journey friction less."
- "Innovation happens when customers are irritated." Earlier this month, I heard a FinTech company founder explain how he was inspired to start his company because of an extremely bad experience acquiring a home mortgage. Great example of innovation inspired by irritation.
- Banks and Financial Institutions must be digital at the core. This requires re-thinking the whole system.
Even though these books are not very old, the world of FinTech is changing fast and you are likely to find that information in some of the case studies is already dated. These are still a great starting point. The common theme across all of these books is that traditional banking and finance companies may find it difficult to keep pace with change when they are hamstrung by legacy technology, processes, and thinking.