Citi Digital Money Symposium: learning to swim during a tsunami
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At yesterday’s (23 March) Citi Digital Money Symposium, the question of a strategic response to fintech and the broader innovation challenge was posed to speakers from a number of large incumbent firms in the financial services sector.
Ken Moore, EVO head of Mastercard Labs; Alicia Pertusa, head of CIB digital strategy and transformation at BBVA; and Ebru Palcan, head of TTS EMEA, Citi, cited good examples of innovation success stories (and some failures).
There is a range of paths to innovation within large complex organisations and a number were discussed; such as innovation labs, corporate venture arms, incubators/accelerators and, increasingly, collaboration/partnerships. The panellists agreed that all those paths are likely to be pursued at one time or another depending on the nature of the challenge being addressed. Where there was some difference in opinion was on how to measure the return on investment (ROI) in innovation.
Huy Nguyen Trieu, CEO of the Disruptive Group (and Citi alumnus), noted that he disagreed with the question of creating metrics to measure innovation. Given the challenge that fintech and broader technology transformation posed to incumbent institutions, the current approaches were akin to”‘seeing a tsunami coming and trying to improve your swimming skills”, he said.
Technology is fundamentally changing the cost structure of the business, he observed, lowering the barriers to entry into the industry not just for start-ups but for a wide range of potential competitors – smaller banks, e-commerce platforms etc.
The main ingredient for success, in his view, is the right strategy and that had to come from the top of the institution and underpin cultural change within it.
Whist the other speakers broadly supported that view, as Citi’s Palcan noted, the right response to the tsunami also depended on “where you were standing – on the top of the hill or sea level”.
What has transpired is a picture that incumbent firms are well-aware of how the sector is evolving and that just as important in this emerging landscape (or perhaps “seascape” would be a more appropriate analogy in this instance) is a vision that puts not just current customers at the heart of business strategy but also those who are not currently in your orbit.
By Lisa Moyle, director of strategy, fintech, FinTech Futures Series (Banking Technology’s sister company)
