Forget about 2008,... 2019 is the real deal for banks

As a lucky guy working as Tech and Digitalisation adviser for the Financial Institutions, I have the chance to work with lots of Z-gens!,… it is really refreshing.

As a 40+, I am a veteran who has seen it all for them :-)

Last week, we were discussing about financial services evolution. And some of my team members who was still at college back then, told me that it must have been really something to live the most threatening moment for global economy and banks in the last decades: the 2008 crisis.

They all gazed at me strangely when I said:

“2008 is nothing compared to 2019 who is the real deal for banks”

Most people still think that the 2008 global sub-primes crisis was the most terrible period for the global economy. I do not minimise the negative impact to the economy and the hundreds of thousands of people who have suffered intensely the years after.

But, for financial institutions, 2019 and upcoming years are far more vital and critical.

WHY?

There was no way out in 2008. It hit everybody as a huge tsunami,…

Each and every bank was in trouble: facing bankruptcy, diminishing business and shrinking balance sheets.

In a way, everybody did go down altogether for the entire period,…

2019? A total different story,… A period of Total Disruption. Banks are no more equal against it.

This is the YOU ADAPT or YOU DIE era,…

Traditional banks and Asset Managers have to think their model from scratch.

Conservative ones? Extinct as Dinosaurs in a couple of years.

Commercially, their margins are shrinking,… Clients sit on a ton of cash and do not want to invest. When they do, Active Management struggles to generate Alpha and costs a lot.

On the back-end, Regulatory, Governance and Compliance requirements explode their costs: staff is assigned to manual or old-school tasks (in physical branches, working on spreadsheets or old legacy systems).

And during the last 3 years, they have looked to the rising Regtech/Fintech/Wealthtech solutions passively, waiting for the neighbour to adopt it first.

Today, there is no more choice,… It is the “YOU PLAY ALONG or YOU ARE DONE” era

Neobanks become the HOT stuff: N26, Mettle or Revolut to name a few are no more exotic or marginal players that made traditional banks smile a couple of years ago…

They are here to grow,… Really fast,… And become the real deals.

So, there is no choice: Traditional Banks HAVE to move on,…

Is it easy? Of course not,… All change is painful.

Is it possible? Yes.

And we see it everyday with the banks we work with. First thing to focus on is the fact that Digitalisation in itself does not mean much.

Become a Neobank is like following a therapy: a real introspection is mandatory.

·     What do my clients expect from me?

·     Who can help me with Regtech and Fintech platforms to adopt?

·     How can I manage my Regulatory process?

·     Should I propose passive management? Robo-Advice?

·     How can I manage the change for my staff?

·     How can I train them for new technologies?

Challenging but totally worth it,.. Right?