Banking on Digital Growth
Banking on Digital Growth

Episode · 7 months ago

95) #ExponentialInsights: FIRE: The Secret to Strategic Planning & Innovation


On the Apollo 13 mission, NASA only had one way to get its astronauts out alive: innovation.

It’s something every financial brand should take to heart.

Because you have a choice: Innovate, or die.

So says JP Nichols, Co-Founder at FinTech Forge & Alloy Labs Alliance, whose wealth of experience has taught him that innovation is messy, but it’s the key to survival.

He joins me in the latest episode to discuss:

- Why the real opportunity for financial institutions are at the edge

- How to innovate without going all-in

- How FIRE fuels innovation

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

Listening on a desktop & can’t see the links? Just search for Banking on Digital Growth in your favorite podcast player.

Let's be honest banks credit unionsthat they sell 95% of the same products at 95% of the same pricing backed by95% of the same policies and procedures. And yet you know my my favoriteconversation with bankers as always. Well, our markets a little bitdifferent. You're listening to banking on digitalgrowth. With James Robert lay a podcast that empowers financial brand marketingsales and leadership teams to maximize their digital growth potential bygenerating 10 times more loans and deposits. Today's episode is part ofthe exponential insight series where James robert interviews the industry'stop marketing sales and fintech leaders sharing practical wisdom toexponentially elevate you and your team. Let's get into the show greetings andhello, I am James robert, ley and welcome to the 95th episode of theBanking on digital growth podcast. Today's episode is part of theexponential insight series and I'm excited to welcome jP Nichols to theshow. J. P. Is a top rated speaker advisor and podcaster. He is also theco founder of Fintech forge as well as the co founder of the alloy labsalliance and has been named one of the top Fintech influencers in the UnitedStates. Welcome to the show, J. P. Well, thanks and thanks for having me. I'mexcited for this conversation. Um, you've been thinking a lot, writing alot about innovation. But before we get there, what is one thing that you arejust excited about right now, whether that be personally or professionally?Well personally, I'm excited that it's soccer season again. Uh, not onlyplaying horribly, uh, a little bit every week and uh, but my belovedSeattle sounders are back in action and off to a good start this year. You'regetting back in the game yourself playing 11, 11 again, right? Yeah. Forthe first time in 37 years. And how is that going? How are you feeling? I'mexhausted. It's a lot of running. The good news is on the full field likethat. There are times when the ball is a mile away from you so you canactually stand and catch your breath a little bit. But when you have to run,you really have to run. Absolutely. You know, it's, I've been getting asked togo playback basketball, played basketball growing up and they asked meto come back and play on some leagues and I'm like, I have four small kids,you know, I've got this business and everything else I would love to and soI'll just keep doing my running thing in the short term. But no, I I feel youon that on that out of breath. Um The only good news is I qualify this yearfor the over 60 age bracket and I'm at the lower end of that. So I finallyfound a peer group I can keep up with. Well there you go. And I want to talkabout this idea of peer group because that's a that's an interesting segueInto some of the work that you've been doing um really over the last year, 12,15 months since this pandemic surprised us all, let's start collaboration. UmThey need to collaborate in an environment like this versus trying tocontinue to work independently Amongst one another. Where the opportunity isthere for Collaboration. There are so many. I mean you think about theindustry, let's be honest banks credit unions that they sell 95% of the sameproducts at 95% of the same pricing backed by 95% of the same policies,procedures. And yet, you know my my favorite conversation with bankers isalways, well our markets a little bit different. I'm I'm always still waitingfor explain to me the part that's that's really different. Um right, youhave customers that have financial needs and we have to take care of them.And so there are so many things that um you know, every bank is creating ontheir own where it would be much cheaper, much, much faster and a betteroutcome if they were collaborating with others. And that's one of the reasonswhy we started the alloy labs alliance.

We we started with 12 founding banks in2018. We got about 50 today who are working together to bring new ideas tomarket and um together make investments in the future, adopt new ideas and uhyou know, the pandemic actually proved to be a good time for that because theywere really faced with some complete uncertainties. You know, banking as aprofession has been around hundreds of years now and so many of the so calledbest practices have been around for decades if not centuries. And um wewere talking before we recorded about some of the teaching I do with thegraduate schools of banking and and they're all about like teaching thosebest practices the same things that everybody else is doing and thepandemic really um you know, kind of throughout the playbook for everybodyand they had to adapt um to that banks. Even the biggest lag arts that were youknow, holding off on digital transformation suddenly found, well ifnone of my branches are open and I still have customers that I need totake care of. Um we're gonna have to find some way to do that. So it reallykind of opened things up over the past year or so. Yeah. And you think a lotabout this idea of Innovation in financial services, you you wrote anarticle that was titled Banking's Apollo 13 moment. And in that you hadshared for more than a decade now I've been trying to convince bankers thatinnovation is not optional and that organizations that were not innovatingwere slowly dying. So I want to go back a decade because you talked about thisidea of centuries and decades. Let's go back a decade and review what hashappened around innovation in banking. And first off, what really kind ofspurred the idea for you to focus on innovation to begin with in the firstplace. What inspired you? Well, I spent 20 years as a banker helping to grow a$6 billion bank to a $400 billion bank today, that's known as U. S. Bank. Andin 2000 and seven when Richard Davis became ceo, he said, you know there's alot of great things you would say about us bank. They were then as they are nowback to peer group, right, the leader of the of the peer group of the top 10banks. Number one in our own way. Number one in are we Number one on anefficiency ratio. But they weren't very innovative at the time and Richardwanted to change that and I found that really exciting. I mean I had a fulltime day job. I was chief private banking officer but I was asked to joina group of people to build what would end up being the first enterpriseinnovation office um uh led by Dominic ventura who who's now leading all ofthat across the whole firm and quite capably. And I really got onto thisidea that, you know, there we just spend so much time doing the samethings a little bit better, a little bit better. And that's important too. Idon't mean to denigrate um incremental innovation, it's important to continueto improve the things that you're already doing. But there just weren'tenough of us thinking enough about how do we do something completely new? Howdo we look at? You know, 10 years ago we were still pretty early in the riseof Fintech, but Fintech were starting to come out and solve problems thatpeople really had that banks weren't thinking about yet. And, you know, wecan go through any number of the biggest innovations of the last decadeor so. And uh I don't know if I can think of one that originated at a bank.It's interesting that you talk about incremental innovation versus what Iwould consider exponential innovation or more of that 10 X thinking versustwo X thinking. And and when you think about this and this is something thatyou've you've written about change happens in in two phases, gradualchange and then changed. It happens suddenly, which you know, graduallytakes time decades uh from a horizon...

...line. And then suddenly we've we'veseen that with with Covid being the accelerant. When we think about thestory of Apollo 13 um when the crew uttered the famous words HoustonHouston, we've had a problem, we've had a problem. You feel banking has had aproblem, How would you frame this problem? And what is that biggestchallenge confronting banking right now? Well, I wrote that post a year agobecause we were on the 50th anniversary of that, it was kind of timely, but Isaw parallels to um the pandemic, the Apollo 13 mission left Cape Canaveral,Cape Kennedy um with, you know, one of the most ambitious missions ever. Theywere going to do a lot of research on geology on the moon and and looking atum uh flight pass and an orbit paths of the moon. And and and Some of the otherthings that were happening in space. And they really went very ambitiously.They had done however many trips to the moon by this point and, and, you know,kind of became didn't seem as risky, right as Apollo 11. Uh we we've we'vedone this a couple of times already. Let's let's just get up there and andlet's do all this research. And suddenly one little thing change, Anoxygen leak that that threatened the life of the crew. And so suddenly themission of Apollo 13 and all of NASA. In fact all of the nation, I wouldargue, I'm really focused on can we bring those three men back to earthsafely? And I think the pandemic did that for the banking industry wherepeople did their strategic planning in the fall or Early in 2020 and all thatgot thrown off the window. And suddenly they had improvised. And and one of thestories about Apollo 13 is uh the ground crew in Houston were um mockingup a way to use the oxygen tanks from the lunar escape module to be used inin the command module. And it didn't quite fit. Another analogy to bankingtechnology, right? The pieces didn't always connect very well. And theyliterally were using duct tape and uh covers of manuals and at one point theysaid, you know, stuff a sock down in the bottom to fill it up. Innovation isoften messy like that. And bankers are kind of not wired to think about messyand duct tape and stuffing socks and things. Uh they really want to believeit's something that we could put our best minds around a big conferencetable at a nice resort somewhere and say boy, we've got a good strategicplan. You know, now let's go after it. And it really threw a wrench into that.So I think it the pandemic exposed this lack of real commitment to digitizationthat is right in front of all of us. We live our lives so many of us um prettydigitally watching whatever we want on demand, ordering whatever we want. Andthat only increased during the pandemic, you know, from food to merchandisedelivered, Contact Leslie to our home and to kind of hide all of that and say,well yeah begrudgingly, I guess we should have digital account opening butI'm not really going to change and anything else. And I call that puttingdigital lipstick on the analogue pig just isn't good thing, yep. Same thing.And you know I think this idea of change and transformation you hit thenail on the head when you say that most of the core functions of banking havenot and probably will not change, you know will continue to take and holddeposits, make loans provide liquidity, move money in and out, providefinancial advice and products. But even though the what won't change youbelieve it's the how the how a financial brand delivers these corefunctions for example, to back to this point. The way we buy and consume media,movies, music, even food now post...

...pandemic groceries. It's the how thathas transformed the most. And so when we look at the howl of transformation,what what are those opportunities there for financial brands? For banks, forcredit unions? Well maybe I'll hit a quick threat first before I talk aboutthe opportunities because what what you described there um the medium is uminvisible, right? It's not that I want to be staring at my phone or my ipad orwhatever it is that I want to watch that new series on amazon and the phonemakes it possible. And so for banks that are used to being that um you knowthird party between borrowers and depositors between um you know counterparties and transactions and so on. Um The distribution of finance uh you knowwith with a middle man being taken out is an existential threat. And and Ithink the opportunities um are first of all say I think that's one of thethings that's hardest for leaders to understand. Um they look at theircustomer satisfaction scores because they often asked the wrong thing, hey,you came into the branch. How did that go when people go? It's pretty good.Everybody is really nice. And you know, I did exactly what I wanted to do.We're not asking kind of the other questions. Well, what if that couldhave been done automatically? Not only, you know, done on your phone? What ifyou didn't even have to come in at all? And it already did it? And so that'spretty daunting to a lot of leaders. But your question about theopportunities before we get there, I actually want to give an anecdotalstory because I think this would make a lot of sense. Like you talked about,the medium is invisible. Let's go back. The year is 1996. Um, what are youdoing on a friday night? Uh, you know, where are you going? Uh, if you havekids for the dear listener, where are you going yourself? With, with, with,with your, your significant other, you walk into this place and what are yougoing to rent? Yeah. Right. Um, you know, you're, you're, you're alludingto blockbuster, which, which is uh, you know, an overused analogy and yet underexamined in mind the under examined piece of this that I want to dive intobecause so if you think about the home entertainment market, the home videomarket, right? That was a super fragmented industry, mom and pop shopscouple 100 square feet, a couple 100 Titles in stock and Amazon, uh, sorry,blockbuster at the time executed that business model better than anybody else.Right. So they invested in um, 10,000 square foot stores in grade a space istrained people to make recommendations. They put massive investment intoquantities of the movies so that the ones you wanted were in stock. They hadregional warehouses with barcode because it it was horrible you to walkin there and you want to get the latest release and all the films would be gone.It was a bad experience. Well, I used to joke, you know, you walk in allexcited after work to come home with Beverly Hills, A cop, and then you walkout with camp Beverly hills because that's the best you could do. And soblockbuster changed all that and they were at one point had 40% global marketshare of the home entertainment market. I mean it's easy to laugh atblockbuster now. Um but that was not just a good company, it was a greatcompany. And if you think back to the first major competition, what would endup putting them out of business netflix and think about what their originalbusiness model remember? It was red...

...envelopes. Uh, and I often use this asan example in the boardroom and in the classroom. Um I asked people to putthemselves in the shoes of the leadership of the board of Blockbusterand somebody says, guys, we have to pay attention to this, we've got this newcompetitor, it would be completely normal and rational to laugh at thatand say their mailing a DVD and you'll get it in a few days. Uh That's not,you know, look at our customers who are just thrilled at at walking around onfriday night. It's packed in here and they're buying Twizzlers and popcornalong the way. But you know, we understand what the experiences. Yeah,well, The apocryphal story is supposedly, is the egregious late fee.Um right. The supposedly now reed Hastings is as some sort of disavowedthe story, but that he returned ironically Apollo 13 um and had amassive late fee and um so began to, you know, craft a a new um competitorfor this. Now. Also apocrypha lee is supposedly, he also had an eye towardsdigital all along. And um I don't know if this is a little bit of reckonhistory, but supposedly um you know, the story goes well, we knew that thiswas going to be all digital at some point, the technology just wasn't thereyet. So we were building our database and building out the long tail where wecould have nothing was ever out of stock because we could always have ithere. You might have to wait a few weeks to get it. But um it's completelyunderstandable how blockbuster missed that. And you probably also know thispart of the story that um you know, uh netflix had a hard time scaling andoffered to sell themselves for 15 million, Eight million. They wereliterally laughed out of the room by a blockbuster management, we'll justwatch you die and you know, so you asked the question, you know what,what's the pain point and um it's not always obvious and so where I try tohelp people spend more time is really digging deep beyond those surfacequestions of hey, how is the branch transaction day? Oh it was good, soeverything's good, we don't need to change everything. Um I'm a bigsubscriber of jobs theory. Um You know, people hire products to do jobs forthem and the more you can understand that job, the pains they're trying toavoid and the gains they're trying to achieve. And and it's um it's oftenseveral layers deep and the customers don't know uh supposedly Henry Ford.Never really said um If I could ask my customers, they would have said um theywanted a faster horse. But that's too good of a story to let go. Um So Icontinue to repeat that story too. It's not just asking the customers, hey,what about this? There there are so many um opportunities and where we'refocused right now the banks we work with is um what my partner, JasonHendriks has been calling the edge of money. And his point is that financialinstitutions have been focused on being the center of money. And um theopportunities are really on the edge because at the center of money it'sdebits and credits and dollars and cents. And we're really good atmanaging that. We're really good at that. What were not so good at isunderstanding the context and the subtleties that you know, the reasonI'm I'm here applying for this loan is not because I want a banking experienceis because I need a new home because my I'm relocating or my family isexpanding or whatever technology has transformed our world and digital haschanged the way consumers shop for and buy financial services forever. Now,consumers make purchase decisions long before they walk into a branch, if theywalk into a branch at all, but your financial brand still wants to growloans and deposits, we get it. Digital growth can feel confusing, frustratingand overwhelming for any financial brand marketing and sales leader, butit doesn't have to because James robert wrote the book that guides you everystep of the way along your digital...

...growth journey, visit www dot digitalgrowth dot com to get a preview of his best selling book banking on digitalgrowth or order a copy right now for you and your team from amazon inside,you'll find a strategic marketing manifesto that was written to transformfinancial brands and it is packed full of practical and proven insights youcan start using today to confidently generate 10 times more loans anddeposits now back to the show. Well, when you think about being at thecenter of money, think about Blockbuster, they were at the center ofthat movie rental entertainment experience and we remove the middle manout of the equation. You're starting to see that now trending with cryptobecause now we can I can pay directly Blockchain, all of that. That's and soI like this idea of moving from the center uh out to the edges. Um, I can'thelp but think of another film analogy of Mr Miyagi, when you walk in themiddle of the road, actually when you walk on the left side, you're okay.When you walk on the right side, you're okay. But when you walk down the middle,just like grape. So it is, yeah, that's that's a great point right there aboutmoving from the middle to the edge of money. Uh, and and and that's where theblue oceans are, right? That's where the opportunities are to do somethingdifferent. Everybody's playing in the middle of all that. And, you know, Ijust don't have a lot of brand promises to make about, hey, don't worry. Um,we'll move your money quickly and efficiently and cheaply and we won'tlose a penny. Well, neither is any other bank. It's kind of like, you know,so many. And I know marketing is your domain and not mine, but I think about,um, you know, just like automobiles, Hey, I want an automobile and you know,I need to have, um, power windows and I need to have power brakes and airbagsand the navigation system and all of those kinds of things. Well any carwill do that. That's not what what marketing is is all about. It's about amuch bigger and more esoteric brand promise around that. And that's hard todo. And I know a lot of financial institutions have tried that may trykind of fluffy, you know, marketing around, you know, feel good moments andall that kind of stuff, but it has to be met with, um, kind of solving, um,some problems that customers actually care about. That's what jobs theory Ithink comes back into play and Derek Sutton and I over Auto Books, we justhad a really good conversation about that a couple of episodes ago, becauseit really is about, you know, one of the people's biggest questions andconcerns, what are their hopes and dreams and then what what jobs areneeded to perform to bridge that gap between. And so when you look at theedge of money, what are those opportunities at the edge that you'reseeing for financial brands? Well, first of all, I would say Auto Books isgreat. We love Derek, we're actually working with him with a number of ourmembers and assume he talked about this with you. But you know, they're reallylooking at um you know, paying the invoice that ought to be the center,right? That's the key job that small businesses have. I think there's somany opportunities um for the small business, we were still in the earlystages of all Fintech um in consumer banking, but we're really just barelyout of the starting gates on the small business side and customers have somany needs around moving money. And um uh 81% of businesses don't have anyemployees. Uh Derrick may have talked to you about this, we talked to himabout this recently and um he's talked about looking at banks and findingcustomers hiding in consumer accounts, but they're making businesstransactions because they're blending that they don't want, yes, they can goopen zero or Quickbooks account or whatever, they don't want to, theydon't want to be a CFO, they wanna, you...

...know, make furniture or so hats orwhatever their business does. The rise of the gig economy too. I think we'regoing to see more and more of this going forward Well and and the rise ofthe gig worker and the needs that they have are barely being addressed. Um youknow, so much of the banking industry is still built around. Um you know, youwork for a company for 35 years and have a pension and a 401K. And aregular paycheck and um all of those kinds of things that are less and lesstrue every day for everybody. So there are so many opportunities aroundunderstanding um what are you actually trying to achieve here? And is there abetter way of doing it? Another plastic story outside of banking? We talk abouta lot swiffer, right? Um You know for years um manufacturers made more waterabsorbent mops, less absorbent mops. Or ergonomically designed buckets and allof this when when the final solution came about it wasn't a mop or a bucket,right? The swiffer is a category in and of itself multibillion dollar categoryfor Procter and Gamble because they understood there was a job to be done.Yes. Clean the floor. But a good enough job that's really quick and doesn'tmake me messi in the meantime. It's those subtleties around things likethat. And that's why it's interesting to see like what players like Shopifyare doing, right? So that's the e commerce side. But then they have thiswhole new line that they're bringing on. And when you look at the website, italmost is framed around the jobs to be done, start like start a business, sellonline, market your products and manage and under manage, you have payments,shipping and capital. So it's really framed around these different jobs thata business would need to do to make money. Right? And I think Square andPaypal do that really well. And um, you know, some banks do, but there's stilla lot of opportunity for traditional financial institutions, banks andcredit unions to, to really, um, you know, every rock hasn't been turnedover yet. There's lots of opportunity out there. Absolutely. And when youthink about innovation in financial services and think back over the pastdecade or so what is a commonly held belief that others might have that eventhe dear listener might have, that you just might passionately disagree with. Um, I think financial institutions, um,Take much higher stock in there. Very definition. Hey, we're a community bankand that really means something to people or where a credit union and thatreally means something, it means something greater than zero, right.They're not completely wrong about that. Um, I mean this, this came up recentlywith the ruling against chime and apparently pending against some of theother neo banks, they can call themselves a bank. And I tweeted outkind of a joke that the laggard banks are going to say, checkmate game overright, can't call yourselves a bank now, what are you gonna do? Well, they'regoing to continue to have 12 million customers who are really happy andthey're going to continue to grow. And so I think the labels matter far lessto consumers than um, than the financial institutions think they do.You know, and you think this idea of legacy of, and this is from a marketingperspective, the, you know, position around with the best place to work inthe city and that's their, that's part of their go to market strategy and Icome in from the outside like no one cares now, maybe best place to workfrom a recruitment and Hr Absolutely that's important. But if you're talkingabout growth and acquisition and retention does it really matter? Sopersonally I think there's some value in that I and and The people that Iknow in the industry are really sincere...

...about this, they really do care abouttheir communities and they really do invest in their communities and that'swonderful. I don't want them to stop that. All I'm saying is um there areprobably about 48 other things that consumers value higher than that andyou need to pay attention to those things. I agree. And when you talkabout paying attention and looking for areas to focus around, you teach aframework about innovation through the work that you're doing over at alloylabs called Fire. And I love acronyms because that's how this 80 D mind canactually remember things. And so we have a lot of acronyms that we use overhere as well. And Fire is an acronym for fast iterative responsiveexperiments. Can you briefly break down this framework and really kind of thisidea of experimentation? Sure. Um, well, I'll hit each one quickly right firstis fast and that's really important. Um, I often joke that um, financialinstitution leaders tell me, hey, we're fast follower. And I often reply, well,you're half right, There's nothing fast about anything you're doing, but you'redefinitely a follower. And um, I get that very few institutions want to beout on the bleeding edge to launch something nobody has ever done beforeand that's fine. But you've got to be reasonably fast. There's literally abank in 2019 that was practically bragging to me about how you were goingto soon be able to take out your phone and take a picture of checks andactually make a deposit through their mobile app. Can you imagine this? Right.What an incredible innovation they had. And I said, yeah, that'd be great ifthis was 22,009, right? Not not in 2019. So if you don't have remote depositcapture by all means, go do it. But don't tell me that that's game changingfor you, right? That's catch up spending. So that's fast intuitivemeaning that um we want to continually tweak. It's not um think really hardlaunch and success. Um it's that we're continually learning from the market,learning from customers and adapting from that um responsive meaning thatwhat's driving those iterations is data. I also like to joke that in the absenceof data, what we have to go with is what we call the hippo, it's thehighest paid person's opinion. And I think of Jim barksdale when he was Ceoof Netscape and he used to say, look, if we're gonna go with data, let's godata. But if we're gonna go with opinions, let's just go with mine. Andsometimes you have to do that. Sometimes you just need to make a leapand the leader has to make a decision, but leaders can make better decisions,the more data they have and finally experiment. Um, and the important thingabout experiment is it means you don't really know what the outcome is. Youhave a hypothesis and you want to test it so that he is testing it as quicklyand as cheaply as possible to find out. And the analogy I use here is oftentalk about uh playing poker and I often joke around um if I'm in the classroomover the board room and, and I'll say, hey guys, does anybody here play pokerI'm learning, I'm watching it on television and I understand that whatyou are supposed to do is push all your chips into the center of the table atthe beginning of the game and you stand up and you say I'm all in, is that howyou play? And of course anybody that understands poker kind of laughs andsomebody usually says, oh boy, I'd love to have you at my game if you thinkthat's how it works. And so it's a little bit of a Socratic dialogue toget them to understand that, look, you want as little money on the table aspossible when you don't have any cards, because cards represent data, I have noidea what's going to happen. Um, what's the minimum I can do to get in thisgame? And then once I get cards I get data and if the data looks good, I wantmore money on the table. If the data looks bad, I'm gonna fold and come backand try something else. A different experiment Now. It's not a guaranteeright? Even if I hold four kings, um, I can still be beaten, but at leastthat's where I want to put more money...

...and so, uh, so it makes so much sensein the context of, of poker. But yet that's not how we do strategic planning.We think that when we look at big projects with big risks and big budgets,that the idea is to think harder, ask more questions, create a longer um, setof due diligence questions or an RFP um, to try to get all the technicalquestions answered and, and then, you know, threaten somebody with, you know,this is your tail if this doesn't work and then then you know cross ourfingers and launch. And reality is it's a lot less risky if we figure out howto break that down into a series of smaller bets and try things. And sothat's really the art uh fires how do we break these things down into smallexperiments and learn along the way? Yeah. M. V. P. Minimum viable product80% getting 80% of the way, get it out, tested iterated. Just had aconversation with joe palette. See who was the ceo of the Content MarketingInstitute and wrote a great book that he is re releasing now called ContentExecutive Edition. And there's a lot of this thinking that can be applied inmultiple areas of the financial brand. Whether it be on the innovation side,whether it be on the marketing side, the technology side, the cells side,the opera. I mean, so literally we can keep, keep thinking about this idea offast iterative responsive experiments. You know, when, when you go in andyou're, you're teaching this. Yeah. What what are some of the mentalblocks that might hold an individual or a team back from really saying? Youknow what? I get it. I understand it philosophically and I love the idea ofSocratic discussions. That's a conversation for another day rightthere. But uh, that's the teacher in me coming out. But what holds people backfrom really accepting and acting on this type of thinking here? Well, Ithink there's, there's a lot of things and we're fans of the worker carolDweck and the growth mindset. Yeah. And um, you know, any time you're anincumbent in an industry and especially a mature industry, um, it's really easyto um, have your your mind kind of framed by, look, there's an empiricallyright answer here. And um we're doing the best practices and and we'relooking at um our peer group and and we're measuring all these things andand we're missing all those things that are happening on the other side. UmThere's probably another layer of financial services in particular, abusiness where um you have to be right, 99 point something percent of the timeand your credit decisions and that's the number one driver of earnings isnet interest income. I was just with a group of students a couple of weeks agoand we got into a little bit of this discussion and I said, you know, I findit ironic. I said, please tell me if there's one I'm not aware of because Ican't think of a single bank that failed because of their innovationprogram or their digital banking. Alright. Every bank that's ever failedhas failed because they've taken on, you know, too much of the wrong kind ofcredit. And um and isn't that ironic? That's the part that they know the best,the part that's been perfected of the whole industry is is, you know, takingin deposits and marking it up and lending a back out yet. That's thenumber one cause of failure. And then, but I guess it's just the devil, youknow, this is the devil that you don't know. And so there's just a lot of umfear around the uncertainty of things. Technology creates another layer offear and uncertainty. And so many of our leaders today um in the financialservices industry don't have a strong technical background and um I don'tknow that you have to be a programmer necessarily, but you do have to be kindof comfortable with technology and so what they often do is then delegateimportant strategic decisions to the tech team. And I'll never forget the CI. O. That once told me, you know, my...

...worst day is when the Ceo goes out toanother tech conference and it comes back with 10 business cards. Hey, thesecompanies are all cool. You gotta go, you know, we have to work with themshiny object syndrome. Right? And so then you have all of these kind ofdisconnected um projects that aren't moving the needle anywhere. And youknow, we've seen this, you know, we've talked about over the past decade or so.One of the other things that's kind of come and short of gone is the rise ofthe chief innovation officer and an innovation team. Right. All the bigbanks have them and still have them. Most of them have turned over. Um someof the smaller banks have tried it and have said, well that was a whole bigwaste of time because they thought it was about, you know, thinking reallyhard and finding the next big idea, not finding a little idea and iterating onit till it becomes meaningful. Yeah, I just heard a great conversation fromJeff Bezos is talking about this idea of innovation at amazon and how all ofthe massive failures and he was talking billions and billions and failures. Onesuccess though, it covers all of that and then some I want to bring this allthe way back to the beginning and jp this has been a great conversation andappreciate the thinking and the insights that you've shared today forthe dear listener. But to start this conversation, you said, innovation ismessy. Uh innovation is messy. And when we think about this idea of change andtransformation incremental, you know, small start, small progress is greaterthan perfection. What is one small step? One small recommendation? You can leavethe dear listener with today that they can take action on Just to take onestep forward in their innovation journey. Um you just start runningexperiments, right? Even if they're not framed very well. Um just try somethings and and then the key there is, there's a misunderstanding that thatrisk is kind of binary things. Are the risky or not risky. Um So so thinkabout what are the degrees of risk if if you're going to test this thing, umwhat's the biggest question you have? My partner Jason likes to call thekiller experiment, right? If this one thing isn't true, nothing else matters.So go test that. And so most often that probably has something to do withcustomer acceptance. And instead, we see so many institutions spend alltheir time on the technical feasibility unless you're doing somethingincredibly experimental. Uh, it's probably technically feasible maybe ata price. You can afford, maybe not. Um, but I would really encourage everybodyto focus their experiments on the customer and um, just try some thingsand that you don't have to build it. You can build brochure ware andvaporware and um, you know, I can't tell you how many so called quotewebsites I build on power point. Just say, hey, it would look like this andyou click here and it does this, you know, tell me what you think, um, anddevelopment exactly. And just trying some things and then, um, talking toyour customers in that way, You know, you know maybe a couple of years agoJames robert I might have said um the answer that was talked to yourcustomers and I think what I've heard a lot in those years as so we do that wewe do talk to our customers but we talked to them about the stuff that wealready do and so um experiment with your customers is probably betteradvice. And um we've seen just such positive um learning experiences frompeople that have done that and learn things that they never knew. Neverwould have found out absolutely to build upon that thinking as we wrap uphere talking. Yes but people don't always tell the truth. That's why youcan undercut that talking by just simply watching and observing theirbehavior and action in any type of...

...these experiments. And you combine thetwo data sets together the quantitative and the qualitative and that's where Ithink you're gonna get some massive breakthroughs JP anyone who islistening, they want to continue the conversation that we started today.What is the best way for them to reach out? Say hello, connect with you. WellI'm in twitter and linkedin, JP nickels and I C. O. L. S. No H. Um and uh alloylabs dot com. All right connect with JP learned from J. P. And J. P. Thank youfor joining me for another episode of Banking on digital growth. Thanks forhaving me as always and until next time be well. Do good. Make your bed. Thankyou for listening to another episode of Banking on digital growth with Jamesrobert. Ley. Like what you hear, tell a friend about the podcast and leave us areview on apple podcasts, Google podcasts or Spotify and subscribe whileyou're there. To get even more practical improvement insights, visitwww dot digital growth dot com to grab a preview of James, roberts, bestselling book banking on digital growth. Or order a copy right now for you andyour team from Amazon inside, you'll find a strategic marketing and salesblueprint framed around 12 key areas of focus that empower you to confidentlygenerate 10 times more loans and deposits until next time, be well anddo good.

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