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“Doing digital” doesn’t equal “Being digital”

Chris Skinner: Having a mobile app doesn’t mean you’ve gone digital

UNconventional Wisdom is a periodic guest blog where the conventional wisdom is held up for fresh inspection. If you have some "UNconventional Wisdom" to share, email UNconventional Wisdom is a periodic guest blog where the conventional wisdom is held up for fresh inspection. If you have some "UNconventional Wisdom" to share, email [email protected]

At the end of most of my speeches, I get someone raising questions around security and regulations. What was interesting is that I got the regulatory one this week, but my host told me afterwards that one of the bankers in the audience had come up and said he was surprised that I hadn’t talked about security.

Before I could say it, my host made the comment, “He doesn’t get it, does he?”

I was a bit surprised but then we had spent quite a bit of time together talking digital transformation, and they were pointing at the fact that there is an enormous difference between doing digital and being digital.

What digital isn’t, and is

I guess my host had understood my message. It goes something like this.

I see stats, surveys, and research that give me various figures of bankers’ complacency about digital. For example, a CGI survey found that 80% of senior bankers surveyed believe they’ve done digital. Gartner published a stat that 76% of C-level bankers surveyed see digital requiring zero change to their business model.

These figures are right, in the bankers’ heads, because they think digital is a channel, delivered today via mobile apps. Yes, they have done mobile—but mobile apps is not what digital is about.

Digital is about a reimagining of finance using technology. In fact, digital requires a complete rethinking of the business model.

This is because the banking business model is built for physical distribution, whereas now we are moving to digital distribution.

Banking has its heart in its back-office products, and thinks about pushing products to customers through channels. Digital has its heart in real-time availability, and thinks about using customer data to create intimacy through devices.

Banking has added technology to its core products, and calls these channels; digital is adding financial products to its technology, and focuses upon access.

I know that digital demands a rethinking of the business model of the bank, as the banks’ business model doesn’t work in the digital age. In fact, when banks talk about channels—a digital channel—I know they don’t get it.

Channels is the old business model that layers itself on top of transactions. Access is the new business model that starts with the customers’ digital footprint.

Transformation versus faster and cheaper

The two models are opposites. One requires a transformation whilst the other is just banking-as-usual, faster and cheaper.

In fact, the CGI and Gartner stats both shout that bankers believe digital is just banker-as-usual, faster and cheaper. It’s what they’ve always done with technology—deploy tech to create greater efficiency and reduce costs.

The fundamental change today is that the technology is open sourced and in a marketplace of platforms that connect people who have money with people who need money.

This technology has four attributes:

1. It is focused upon software and services, not buildings and humans.

2. It demands partnering and collaboration, not internalization with proprietary systems.

3. It is open and transparent, not closed and opaque.

4. It is globally connected, not locally located.

For any bank leader who thinks their organization will survive with zero change to their business model, I feel sorry for them. They are leading their firms into obsolescence. But then 94% of the C-suite board members of banks are bankers, so it is unsurprising that they do not understand how digital is a total transformation of the business, not just banking-as-usual.

Going digital means big changes

This brings me back to where I started.

Cynical bankers, who understand banking and don’t get the message, will always raise security and regulation as the focus for the future.

Sure, security and regulations are important, but if you understand that digital is revolution in thinking about money, and the business model that goes with it, then the last thing you would start with is a focus upon security and regulation.

The first thing you would focus upon is how does the business model need to look for the future, and how are we going to get there.


This blog is taken with permission from The Finanser, Chris Skinner’s blog, where it appeared under the title, "Banker: We've done digital! Skinner: Oh dear”

Chris Skinner

Chris Skinner has become known as an international independent commentator on fintech through his blog, the He is the author of the bestselling book Digital Bank and its sequel ValueWeb. Both books have been reviewed on and a chapter excerpt of ValueWeb also appears on the site. Skinner chairs the European networking forum: the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand and has received similar honors from The Wall Street Journal and other organizations. Visit Skinner's professional website.

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