Banking on Digital Growth
Banking on Digital Growth

Episode · 1 year ago

21) #ByTheBook: Think Beyond the Present Moment or Get Stuck in the Past

ABOUT THIS EPISODE

Is your financial brand stuck in the present moment?

Too afraid of risk? Of loss?

If you don’t think strategically about your future…

You’ll get left in the past. 

In the latest By the Book episode, I explain how the natural risk-aversion of financial brands prevents actually becomes a liability in the future. 

You can find this interview, and many more, by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

You're listening to banking on digital growthwith James Robert Lay, a podcast that empowers financial brand marketing, sales andleadership teams to maximize their digital growth potential by generating ten times more loans anddeposits. Today's episode is part of the by the book series where James Roberton locks and shares the secrets of digital marketing and sales strategies for financial brandsfrom his best selling book, banking on Digital Growth, the strategic marketing manifestoto transform financial brands, that is now available on Amazon. Let's get intothe show. Greetings in Hello, I am James Robert Lay and welcome tothe twenty one episode of the banking on digital growth podcast. Today's episode ispart of the by the book series where I share insights for my best sellingbook, banking on Digital Growth, the strategic marketing manifesto to transform financial brands. I'd like to start off to day by giving a shout out to ramytea for his Amazon Book Review Rommi Rights. For someone who has been in thefinancial industry the digital transformation sector, this book is a must. Ialways talk to my clients that you could, you could have the best online andmobile banking channels. Still, without the right audience and customer base touse them, these channels will be useless and will bring no added value tocustomers more than checking their account balance or making a build payment transfer. Romicontinues. My approach working with clients has always been we plan, we build, we grow, and digital marketing plays a role in each of these stages. Rami shares. I was so pleased to finally find a book that addresseshow digital marketing can help you build that lasting relationship with your clients and trulynurture it to provide them with the personalized...

...experience they seek. This is amuch read for every banking executive, regardless of job function. As financial institutionsneed to embrace a growth mentality across all functions. Rami ends I will berecommending this book to my clients well. Romi, thank you so much forthe kind words and I'm glad that you have found this helpful. You'd alsoshared that this was a was a go to guide, and, speaking ofguides, it's what I want to do, dear listener on this podcast, whena guide you and those that you work with beyond what I call digitaldenial. Now, digital denial is actually closely tied to the three future growthpitfalls that I had unpacked an episode number nineteen. We get trapped in digitaldenial when we're shortsighted and we don't see the enormous digital growth potential ahead forreally what it is. A lot of times we'll try this, will trythat, will dabble, but we give up when it doesn't yield results quickenough. That's such a mistake. When any industry is transformed by disruption,inevitably the digital growth potential will always it will always appear limited at first,and deceptively so. You see, when we're thinking about digital growth, we'rethinking about digital transformation. Value Creation out of the gate is most likely goingto lag for some period of time and in some cases it might be nonexistent, or even if there's a tremendous upfront cost to establish new foundational systems, processes habits, it could feel like an enormous weight that just drags usall down. But don't be fooled. This is one of the deadliest blindspots but also the most common. See...

What happens when digital denial is permeatingwithin the leadership team at a financial brand. The leadership team mistakenly makes their mostimportant decisions based on past performance, based on past success, and thisis very understandable, as these folks, mind you, they've built their entirecareer on past performance. But now they're in a situation where they're stuck inthe present moment. But they're making these strategic, present day decisions, whetherthat be around marketing cells growth models, rooted in past perspectives, past experiences, which have really been informed by earlier successes that are no longer relevant oreven useful anymore, specifically in this post covid world. So what do youthink happens when they do that? Well, it really just depends the result oftheir decisions. They might not be disastrous. They may as well continuedown a path of will call it disincremental linear growth. The trend line willnudge up, they'll get that two x performance versus the ten X that I'vespoken about in previous podcast episodes. But that's it. They're not taking advantage, and this is the key. They're not taking advantage of the exponential growthcurve that digital makes possible. You see in digital value creation there's a deceptivedoubling effect referring back to Peter Diamondus's and Stephen Cottler's book, The d's model, which I noted an episode number eighteen, where digital first appears to bring aloss, but then the value and...

...the growth generated by digital becomes twiceas great, which becomes four times as great, then eight then sixteen.It's the doubling pattern which will continue until you reach a point where digital growthbecomes the primary driver of growth and eventually crushes the old legacy growth model builtaround the physical world. Let's look at Amazon, for example. According tothe STREETCOM, without aws and without the prime membership program Amazon lost around twobillion dollars in q one of two thousand and eighteen. Now this loss isreally rooted in the retail side of their business, which, interesting makes upabout sixty percent of their entire revenue model. Put this another way, sixty percentof Amazon's total business operated at a loss. However, they have offsetthese losses with more ultiple, diverse revenue streams like aws, Amazon web servicesand their prime membership program so what Amazon is doing, and really what theyhave done since the very beginning, is they are playing the long game,which is opposite of what we see a lot of risk averse financial brand leaderswho are looking at the situation in the present moment, but they're being informedby past decision. So they play the short game and when we're stuck inthe present moment, we really risk getting crushed, getting run over and nevereven making it into the future. It's a heads down versus a heads upway of operating, but unfortunately I'm still seeing it's very typical of today's legacyleaders. They stay heads down, they're trapped in the here and now.They're using passes and previous biases and previous wins and successes for their decisionmaking,instead of being heads up, looking towards...

...the future and seeing exponential change forwhat it is. And it's this heads down approach that results in the drowningof the deep overwhelmed that are discussed an episode number nineteen. It's true thatbusiness leaders across the board, in multiple verticals and multiple industries. According toa report from Duke University, they found that ninety seven percent of business leadersbelieve strategy is important. That's great, but ninety six percent don't feel likethey have the time to think strategically. If you have not listened to episodenumber nineteen. I go deep, Deep. It's a fairly lengthy episode, butit's all about the importance of breaking free from the doing, breaking freefrom the here and now, the here and now which is oftentimes for informedby the past, to create that space and time to review, to reflect, to learn to think, so that we can do even better going forward. Now, leaders at financial brands would be wise to buck this trend.And sure they're, you know, bakers by default. I get it.Once are there going to be more risk? It verse, it's it's what wedo. We limit risk. We're dealing with people's money, but itmay be for a lot that the limiting of risk becomes a liability, itbecomes a cost, and that is what will take so many down in thecoming years. I am for you. Please do not let our strength becomeour greatest weakness or a fatal flaw. Technology has transformed our world and digitalhas changed the way consumer shop for and...

...buy financial services forever. Now consumersmake purchase decisions long before they walk into a branch, if they walk intoa branch at all. But your financial brand still wants to grow loans anddeposits. We get it. Digital growth can feel confusing, frustrating and overwhelmingfor any financial brand marketing and sales leader. But it doesn't have to, becauseJames Robert wrote the book that guides you every step of the way alongyour digital growth journey. Visit wwwagit growthcom to get a preview of his bestselling book banking on digital growth, or order a copy right now for youand your team from Amazon. Inside you'll find a strategic marketing manifesto that waswritten to transform financial brands, and it is packed full of practical and proveninsights you can start using today to confidently generate ten times more loans and deposits. Now back to the show. We've been lucky to have avoided a lotof the pain, a lot of the misery, for example, that themusic industry went through that I spoke about on episode Nobre Sixteen. We've hadthe the the luxury to learn from the failures of brands that have been downthis journey before that aren't with us today, the blockbusters, the borders, thetoys R us. When it comes down to it, this is whatlegacy banks and credit unions have been doing historically. They're essentially retel or retaillike institutions. That like blockbusters, borders, toys r US historically have been builtfor the physical world. And, as anyone who has read the newsin recent years knows, the retail sector is in trouble these days, specificallypost covid and I was just reading report...

...recently brooks brothers, another wellknown brand, has filed for bankruptcy. But it's interesting because Simon Malls is picking upthese bankrupt brands like brooks brothers the buckle for pennies on the dollar. Andwhat Simon is trying to do is to capture all of this because Simons malls, they want to be the last mall standing. Now, when we lookat these legacy retail brands, blockbuster, and we are, we're going througha retail apocalypse right now. And what these legacy retail brands lacked was leadership, and that is why there's a direct distinction between financial brand leadership and management, where we really must look at this in two areas. Managers Operate andthe present moment to avoid risk and loss. On the other hand, those inleadership positions look ahead to create the future that does not yet exist.Let me be very clear here. One is not better than the other.Great leaders need great managers to apply their strategic thinking to ensure it becomes areality, their vision becomes reality, while great managers need great leaders to ensurethat they don't get stuck in the present moment and make decisions informed by thepast. This isn't happening nearly enough, and it's one of my biggest concernsfor financial brands in today's post covid world, in this digital economy, because thenumber of managers managing financial brands in the present moment for the present moment, informed by the past, far outweigh the number of leaders leading their financialbrands with current Ridge, with confidence,...

...to create a bigger, better,brighter future. How, then, have financial brands not yet been decimated bydigital disruption? That is a really big question ask. For one, bankingis a very different kind of consumer experience than, say, listening to asong, watching a movie, ordering food, ordering a book. The level ofrisk when it comes to banking from from the perspective of the consumer isobviously much higher because they are trusting you, they're trusting your financial brand with theirlife savings. But a lot of that risk is also just perception.And here's the thing that perception of risk is rapidly changing. Just think fora moment. It used to be that people were scared to use their creditcard online, and now we know how ubiquitous e commerce has across almost everyindustry. Still, perception is perception and perception shape's reality and consumer research,at least pre covid, showed that when it came to banking, people,including millennials, wanted to have a physical branch location. It's going to beinteresting, interesting to see how this plays out postcovid as new behavior and habitsare formed. But Pre covid it's that entirely logical. Why this was thecase. You know, people were already doing online banking, mobile banking,but they were reassured to know that a physical branch was there. They coulddrive by and and say, Hey, it's nice to see the building andthink that that's where they keep my money, even though we all know that themoney is not kept there. But, like I said, this this isn'tlogical, and when we're dealing with consumers we're dealing with eological beings.The other thing I want to note is...

...the perspective of government regulation and howthat has slowed down the pace of disruption in the financial market place. Thatalso is changing and we're seeing some of that coming out postcovid with the Charterfor Non Bank fintech firms and more entering the market place. And the factof the matter is financial brands can no longer stave off this coming demise muchlonger. Either we're going to have to make some courageous decisions and lead,or we're going to get left behind. And like it or not, whenit comes to digital will growth, it really is the survival of the fittestout there, and that that I did. The survival of the fittest, whatI call digital Darwinism, is the topic that we will discuss on thenext episode of the by the book series, because I don't want you, Idon't want your financial brand, to end up like the dinosaurs. Untilnext time, be well, do good and wash your hands. Thank youfor listening to another episode of banking on Digital Growth with James Robert Laigh.Like what you hear, tell a friend about the podcast and leave us areview on apple podcast, Google podcast or spotify, and subscribe while you're there. To get even more practical, improven insights, visit www dot digital growthcomto grab a preview of James Roberts best selling book banking on digital growth,or order a copy right now for you and your team from Amazon. Insideyou'll find a strategic marketing and sales blueprint framed around twelve key areas of focusthat empower you to confidently generate ten times...

...more loans and deposits. Until nexttime, be well and do good.

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