Every year in the holiday period, we are reminded of the tsunami which struck the islands of south-east Asia on boxing day 2004. One of the pictures which always leaves the biggest impression on me is one showing a house which miraculously has withstood the forces of the tidal wave, while its complete surroundings are nothing but debris. It makes me ponder how you pick up your life again when the world in which you lived has disappeared.
This is exactly the way that many individuals and organisations react to change. Close your eyes, grab on to the branches of the tree and wait, hoping that it will pass. But if you manage to survive and you open your eyes again, will you still find your way around?
The financial services industry is being hit by enormous waves of change. The upcoming generation of clients which grew up with Facebook, Spotify and other Uber like apps, is not looking for financial products but for compelling services to support them in their life. New predators, large and small, are eager to take a piece of the lunch. And the regulators and governments are inventing new rules and regulations such as PSD2 and GDPR at a high pace. Yet, the financial services industry has been and still is extremely averse to change. The fear to introduce instability has resulted in heavy processes which slow down or even paralyse innovation initiatives. The complexity of the underlying IT applications and infrastructure is often identified as the main cause for the slow progress. The rigidity of the IT environment is impersonated in the yearly release calendars that decorate the walls of many an office in the infrastructure departments of the banks. You have to slide into a predefined release window to get something out in the world. If you miss it, bad luck. Come back next quarter. The release calendar has become the goal on itself, not the tool to introduce new solutions that deliver business value. Of course there are a lot of valid reasons for all these careful procedures. After all you don’t want the bank to grind to a halt if something would go wrong.
It would not be fair to just pinpoint at the IT department as the main culprit. It is equally the organisation of the bank itself which does not invite for change. Though we call them financial services companies, banks and insurance companies actually are organised as traditional manufacturing companies. Financial products are produced in product factories and sold to the market through several channels. The complete organisation of the banks is based on this model. It is reflected in the KPIs and bonus schemes. If your end of year bonus is determined by the performance and uptime of the database, why would you be eager to accommodate an new data intensive application now that you have mastered the craftsmanship to tune and run the database for the current known load. If your targets are set based on the number of products that you sell in your channel, why would you get excited about multichannel (or channel agnostic) apps?
Introducing agility in the IT infrastructure without compromising the robustness and reliability is a technical challenge which can be solved. The new technologies that power many of the social networks and services have proven in the field that they can be the foundation for a new dynamically reconfigurable architecture. But even if the technical hurdles have been cleared, it is not a recipe for success. Putting the client at the centre does not just mean a cross channel, cross product application. It requires a channel agnostic and cross product silo thinking. And the underlying organisation must stimulate and reflect it.
But, a wave is just an enormous amount of kinetic energy which is moving. In stead of trying to fight it, you get much more opportunities and fun when using its energy to propel you. Surf the wave. Embrace change. It’s probably the only constant. Bob Dylan told us already half a century ago.
Come gather ’round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you is worth savin’
Then you better start swimmin’ or you’ll sink like a stone For the times they are a-changin’.
PS : It’s clear that I’m not a surfer. Apparently you cannot surf a tidal wave