Surely not everybody was kung fu fighting

I am going to disappoint some folks here… but there are going to be no further references to kung fu or popular music, or my friend Sam Maule’s t-shirt with those very words on it.

In terms of digital transformation, it turns out that almost everyone was kung fu fighting. And it’s time you did too.

It’s just…

The phrase came to mind… it captured the sentiment of this piece and, as titles go, it was considerably catchier than the alternative of ‘What do you do when innovation is the name of the game, digitisation is our collective lived reality outside the office… but your professional life is spent in a niche area of an established market that isn’t known and therefore creatively accessible to innovators and disruptors?’.

It doesn’t roll off the tongue, does it? But it is what I want to talk about today.

Because when the journey started… this journey that we call fintech but actually is much bigger than that because it encompasses the whole of… well… everything. Fintech is a subset of how life has changed with the advent of ubiquitous connectivity and accessible technology.

When this journey started… we didn’t realise we were part of a societal paradigm shift. None of us did. We didn’t realise how big it was. How far or how fast it would go and how it would all be connected in a way that was more The Jetsons than “Oh look: I got me a new gadget”.

And in those early days, when we were trying digital capabilities on for size, a lot of bankers felt that this was all a problem for their retail brethren.

Not us, was the sentiment outside consumer banks.

This is going to affect retail banking for sure, but we are not as worried.

Not those of us sitting in the lofty ivory towers of investment banking or the deepest recesses of fund accounting.

Not us, was the sentiment at first.

We are safe. We are not affected. We are not interested.

The rational was… digitisation is happening out there in the world and in the economy.

It is not innovation driven by banks.

It is neither invented nor is its adoption driven by banks.

It is e-commerce and entertainment and your man Steve Jobs.

So far, so… not wrong… you may think. And you would be right.

So innovation conversations inside banks are a waste of time, they would say (and they did say it… to me… a lot). We are not inventors. These inventions come from outside and so does the disruption.

I can’t say I disagree with all this so far.

It’s the next statement where our paths diverged: my view was that retail banking was being ‘hit’ first and the whole of the industry could use the time to work things out and… you know… get with the programme. They thought that retail banking wasn’t first. It was just vulnerable. Because the inventors and innovators may not know the first thing about banking but they know about the experience of being a customer of a consumer bank. So they have obvious places and gripes to start from.

But do they know what we specialists do?

Restructuring loan books and reconciling post-trade breaks? We are safe because none of those pesky digital hoodlums with the hoodies know enough to mess with our stuff.

I paraphrase. But at a time when disintermediation was the main fear, this specialist knowledge felt like a defensive moat.

And now?

Almost 20 years on?

With increasingly mature regulation expecting our banks to maintain parity with the technology paradigm of the era they are in… and prescribing transparency, resiliency and oversight commensurate with the technological capabilities of said paradigm… now what felt like a protective moat feels more like a no man’s land separating us from the world.

Because the prediction has held true. Not for the entirety of the rest of the banking edifice… but for quite a lot of the operational side of corporate and wholesale banking.

There are some very cool things happening in liquidity management.

Clearing and settlement are moving closer to the real-time universe (closer I said, hold your horses… we are not nearly there yet).

Tokenisation is on everyone’s mind.

But the pockets of change are creating an ever greater disconnect and sense of isolation for those doing most of their work on Excel still.

Disintermediation didn’t happen. Nobody came in to re-imagine transfer agency. The naysayers were right.

But what they didn’t predict is that the regulatory landscape would shift enough that the pressure to imagine it anyway would come from the market itself. In some cases, it would come from within the very organisations that spent the window of creative opportunity feeling smugly protected.

Those very same organisations may be changing their tune now… because they want to reduce their operating risk or their cost footprint or because they realise that, to do some of the cool stuff and really go down the path of real-time liquidity management or truly commit to tokenisation… maybe you need to kill the mainframe and re-wire how you do things. Re-imagine how you get to the ‘therefore’ of your work.

And maybe the fact that the knowledge of how you do things is so… niche… is not the strength you thought it may be because… look now… the doing and the re-imagining both fall on you now. The holder of said knowledge.

That’s the bad news.

The good news is that you can ask for help.

You can ask for the assistance and support of all the people who’ve been doing this stuff all this time.

Sure… they’ve been doing it in other verticals, but I am sure you can explain the specifics of your world. You can share your niche knowledge with those who have the knowledge you need now. And the experience of having done it before.

Because it does turn out that almost everyone was kung fu fighting. And it’s time you did too.

#LedaWrites

Leda Glyptis is FinTech Futures’ resident thought provocateur – she leads, writes on, lives and breathes transformation and digital disruption.

She is a recovering banker, lapsed academic and long-term resident of the banking ecosystem. 

Leda is also a published author – her first book, Bankers Like Us: Dispatches from an Industry in Transition, is available to order here.

All opinions are her own. You can’t have them – but you are welcome to debate and comment!

Follow Leda on X @LedaGlyptis and LinkedIn.