Transforming digital banking through a cultural revolution

14-06-17 11:15 | Digital banking | The Digital Hub

If you add key banking terms like #PSD2, #OpenBanking, #Disruption or #Fintechs to your tweets, you’ll be sure to get hits and likes on Twitter. However, a true digital tsunami in the financial sector will not come about through changes in technology or legislation, but through a cultural revolution.

The Payment Services Directive 2 (PSD2) is a great achievement, but in the end is nothing but semantics as, even in the #PSD2 era, banks are able to continue building breakwaters against the digital tsunami. The success of the services provided by third parties will be limited if the directive is reduced to something that merely implements the minimum requirements set by law and dictated by technology. Not all banks will have easy-to-use “plug and play” sockets in their systems for customer data, but every bank has quite free reins to implement the requirements of the directive as they see fit.

Luckily we at Nordea think differently. Because #PSD2 and #OpenBanking will not necessarily guarantee that our customers will get Teslas instead of T-Fords, we want to raise the bar even higher. We think that PSD2 will open up a new era for cooperation. The new key words will be #collaboration and #partnership. This will increase the range of services we can offer our customers. I like to think of it as nurturing a new kind of orchard of collaboration that takes things beyond what is required by law; in other words, we will collaborate with our partners to improve our business offerings.

Or, as Nordea’s Group CEO Casper Von Koskull stated the other day in the Digipigs and digistocks article, thanks to our multi-million-euro investments in technology, we are already a fintech and must therefore also think and act like fintech. On the same note, Erik Zingmark, Co-Head of Transaction Banking at Nordea, has rightly pointed out that culture – not fintechs – poses the real challenge to banks. I fully support these kinds of statements because you are what you think. To quote my favourite speaker Petri Rajaniemi: “Results change when the way you do things changes. The way you do things changes when you begin to think differently. Your way of thinking will only change if you question your current way of thinking”. To continue Petri’s train of thought, I would argue that we as a bank are now at such a point of transformation, where questioning our current way of thinking is more crucial than ever before.

Corporate lessons for start-ups and vice versa

What should be the new way of thinking? At my leisure, and due to my background, I occasionally write a Facebook blog called “Corporate lessons for startups and vice versa”. I’ve summarised my observations into three points:

1. Attitude towards openness: “like father, like son”. One of the most important formulas for success for start-ups in Silicon Valley and elsewhere is “be open, talk, share”. Collaborate across organisational boundaries and build up genuine strategic partnerships.

2. Courage, the culture of experimentation, acceptance of failures: Give your organisation permission to learn by trial and error. If everything you do is a success, you are not trying hard enough. The opposite of courage is fear. Do everything you can to prevent fear from steering decision-making in your organisation. Change calls for courage at every level of the organisation.

3. From hierarchies to networked organisations: Create networks that transcend unit boundaries and use more efficient means of communication. If the right hand does not know what the left hand is doing, you should do something about it. Make it show – communicate – because if the strategy is only on paper, it is worth nothing.

In short: think in a novel way. 

So is this how it works? Is it this easy? No. If it were that easy to change how a person thinks, successful companies would not fall while trying to reinvent themselves ahead of their regression and decline. Of the global top 100 brands that were the leaders a hundred years ago, it seems that only Coca-Cola has survived. In other words, 99 out of 100 of the companies have not been able to renew themselves when necessary. But do we at Nordea know how to reinvent ourselves, grow and reorient ourselves in line with the demands we face today? Can we challenge our old line of thinking to become a streamlined organisation and, ultimately, achieve better results through better thoughts? I personally believe we can because I see how even a big ship can turn once it has a captain who knows how to navigate in the fog.

/Jussi Muurikainen, responsible for developing the digital offering for corporate customers at Nordea. He's a decathlete of the digital era and has been involved in numerous Fintech startups as a founder, advisor and shareholder.

Follow Jussi Muurikainen on Twitter @jupander

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