Emotional Banking

Fixing Culture, Leveraging FinTech, and Transforming Retail Banks into Brands

Duena Blomstrom

• Publisher: Palgrave Macmillan
• Year: 2018
• Print ISBN: 9783319756523
• eBook ISBN: 9783319756530
• Topic: Business
• Subtopic: Finance
• Index: Business

Develops a unique concept ("Emotional Banking") that speaks to the core of what is broken in banking today

Showcases a series of real-life examples of brands that have achieved success as case studies

Features interviews with bankers, commentators, and founders of FinTech

Part IBanks Today

© The Author(s) 2018

Duena BlomstromEmotional Bankinghttps://doi.org/10.1007/978-3-319-75653-0_1

Begin Abstract

1. The Relationship Between Financial Services and Technology

Duena Blomstrom¹

(1)

Emotional Banking, London, UK

Duena Blomstrom

Email: [email protected]

What Is FinTech

When Did Banking Go Digital

Relationship or Rail

End Abstract

What Is FinTech

When I discussed this chapter with my editors and advisors, including it in the book didn’t make evident sense at first. This book is not meant for the broadest of audiences, it’s unlikely anyone who works outside of tech and outside of finance will pick it up in an airport and become enthralled by its plot.

At the same time, one could argue that those of us on the inside don’t need spelling out of concepts and this doesn’t aim to be a scholastic exercise exhaustively describing the totality of banking and the technology that serves it.

With all that said, one thing that I have firmly learned over the past few years of my career in this industry is that language is crucially important and that we have—collectively—managed to allow confusion, approximation, acronyms, and a bizarre need for grandeur to complicate it and render it unusable for efficient communication.

To avoid that disallowing us from understanding some of the concepts I have laid out in this book, there are a few key terms I would like to make sure are clarified along the way.

Bear in mind, these definitions are not textbook but rather personal, no less because there are no manuals to describe them.

First of all, throughout this book, when I say “Banking ,” I’m referring to “Retail Banking .” Seeing how the Emotional Banking methods ultimately focus on the relationship with the consumer—albeit through the winding road of cultural transformation translating into better propositions eventually—there will be nothing in this book about other areas of banking such as Investment banking or Corporate and we will confine the discourse to what can be referred to as “every-day banking ” including “current accounts, cards and payments ,” “savings,” “investments,” “mortgages,” and “small business banking /SME banking .”

Also, for the most part, while we will mention key pieces of technology that may aid the relationship, we will remain focused on the state and the betterment of the “front-end ” of banking and the levers of change for it and we won’t be discussing in depth anything to do with the “back-end ” understood as the collection of software systems and infrastructure that make banking IT work.

The “front-end ” consists of all the apps, widgets, or programs that make up the experience that is delivered to the customer by the various “channels” the bank employs from ATM to telephone, to branch and of course, chiefly, through the new “digital channels”—“online and mobile.”

The overwhelming majority of all FinTech propositions are focused on the front-end .

While we can define FinTech as any type of technology that makes the financial sector run and then we can claim it goes back to the first times that any type of computer—or even telephone—was involved in banking , that would be extending the origins of the term beyond its recent years’ scope.

Some even stress the point by claiming the first FinTech company would have been Reuters News in the mid-nineteenth century as they employed the available transport technology of the time (carrier pigeons) to transmit financial news between Paris and Berlin.¹

In reality, the terminology surfaced no longer than 10–12 years ago, and it became an umbrella term including “online banking ,” “mobile banking ,” and then “digital banking ” referring initially exclusively to the sleuth of technological offerings that independent providers, mainly start-ups, were proposing either to banks or to the consumer.

To some, FinTech as a term must absolutely remain confined to referring to the start-ups providing technology to the financial services world as I observed in this blog post.

Everyone Is FinTech, Get Over It²

Posted on March 3, 2017, by Duena Blomstrom

Ok, I will admit: I’m highly OCD about terms AND I have a very low tolerance for what can only be called BS, which leaves me with having to get something off my chest about the term “ FinTech /s”.

I wrote about this before and that was ages ago in FinTech years -2015!- and at the time I was mildly annoyed not highly irritated as I am now.

Let me be blunt: our industry is brimming with neophytes -and let’s just say that is not the first term that came to mind-. One can tell we’re in the middle of peak FinTech by how London cabbies nonchalantly go “ah ok, that’s big these days” when you tell them you’re “in FinTech ”.

This wave of neophytes comes with a sleuth of opinions which is intrinsically good and necessary in a “new blood” sort of way, but some are majorly dogmatic and shockingly loud when it comes to who can call themselves “ FinTech ”, and even more infuriating, who definitely can not.

Now here’s my take as not the FinTech -est around but surely someone who is FinTech -er than the neophytes (see what I did there? made it an adjective, neer neer!):

FinTech is a very broad term that refers to all Financial Technology and you cannot go on and on about how it can only ever describe small, nimble, innovative StartUps, get over it.

To be fair, this is a selfless PSA for the industry and it will work against my newly found guilty pleasure that allowed me, over the past few months, to be at various industry events whether a conference, a posh dinner or an awards gala and revel in the indignation of various parties when I calmly rejected their arguments to support the above.

Most conversations would go like this:

“But you must agree Duena, not every company in the industry is FinTech , only the start-ups are, they need to stop using this term!”

“Nope, not the apanage of start-ups. All Financial Technology”

“Oh come on, not like the big, big ones!”

“Yup, as long as they thought about and/or built, and/or implemented Financial Technology. It’s not about size.”

“No, I mean like FIS, or Temenos or such”

“Yup, FinTech companies”

“That’s ridiculous!”

“It’s not, in fact it’s not only FinTech but good stuff too these days, check out what most of these big guys have in their portfolio or what they show at Finovate, etc.”

“Ok well nevermind, maybe they are catching up, maybe they are becoming FinTech now”

“Nope, been in FinTech all along. Long before most of anyone else”

“Fine, those are tech product companies what about the consultancies calling themselves FinTech ?”

“Yup, them too”

“What?!?”

“I don’t like it any more than you do, they had a late start in “getting it” and I am not claiming they are necessarily selling valuable FinTech advice but it’s FinTech nonetheless”

“OK this is absurd, next you’ll claim banks are FinTech ”

“The OGs of FinTech . Who do you think built the first back-end and front-end of any digital proposition?”

“What? I thought you hated banks!”

“You thought wrong. I love banks so much that I want them to do well. Which is why I cut the BS when I point out where they are currently failing.”

“What are *we* then?!?”

“ FinTech providers.”

And on and on ad nausea. Now that I’ll publish this, I am likely going to get less entertainment and (even) more sideways looks, but it’s worth it to try and stop the “ FinTech is start-ups only” dogma one side of the industry has.

Which brings me to another point. The “sides”. The “us” versus “them” mentality between providers and banks must be unique to Financial Services.

Name me another industry where the innovation in technology that the customers expect, has happened mainly externally from the incumbents due to their sluggish response, and has created an ecosystem of start-ups and high-growth technology creators selling their solutions to the service provider by pointing out how horrible the latter is. We have such a divisive discourse in the industry that the “ecosystem” conversations sound more like the trendy word of the day than a meaningful shared impetus.

Whether you are a veteran or someone who Googled what FinTech was then started having an opinion this month, you can’t deny that -for now- we are in a unique market moment with a fascinating dynamic in our industry to say the least and it would serve us all to want to build bridges rather than point fingers.

Cornerstone of my Emotional Banking TM methodology is the “Keep it real” part. It’s a self-explanatory concept and while banks have an arduous road ahead keeping it real in terms, in more ways than one, providers in turn, owe it to the industry to not develop meaningless jargon and fixed ideas of their own and turn into the very kind of beast they claim to be battling.

Lastly, to me, “being FinTech ” is not about a label but about a burning need to keep building and bettering money services for the consumer and anyone with enough brains and passion is welcomed.

When Did Banking Go Digital

FinTech is by no means confined to the digital channels only, and it is there that most propositions focus so when did banking start needing FinTech ?

While digital bank...

Table of contents

• Cover
• Front Matter
• Part I. Banks Today
• Part II. Emotional Banking
• Part III. The Methods
• Back Matter