Igor Beuker,top international speaker in the field of digital transformation
Survive the digital transformation battle! Innovate now!
Companies of the future have a trend-driven innovation culture. Companies stuck in traditional models are disappearing, jobs are transforming, and technology is shaking the foundations of the financial sector.
Companies are racing to the stock market like never before, and achieving record prices. The boom has been fuelled by a deluge of cash that central banks have pumped into the economy during the Covid-19 crisis. We also saw the rise of individual investors, eager to buy a piece of their favourite companies. New fintech players are becoming highly significant players more often, and faster. They are now being bought at earlier stages by a 'buy not make a mammoth', or a big tech company with financial ambitions. And setting up an IPO is now a relatively fast process. The market is fizzing.
We are about to see the real disruption of banking and finance in the next ten years. When we look into the mechanisms of the Fourth Industrial Revolution, we see a range of exponential technologies, which our linear minds can barely comprehend. Science fiction is becoming reality. In fact, Musk, Bezos, Branson are now flying back2back with NASA. Future success is all about imagination, not being right.
'The biggest challenge I see for the entire financial sector? Old-fashioned men in suits who still think in the classic hierarchical way.'
Generation gap painfully visible
Of course, Wall Street, Banks, and the SEC have been trying curb blockchain, crypto and NFTs for a long time. Power to the people, smart contracting, and transparency are changing value chains and destroying existing business models. You can try to resist these things for a while. But if you cannot beat the movement, join it! Meanwhile, central banks are also taking CBDCs (Central Bank Digital Currencies) seriously, and you can even participate in stablecoins in the US.
Young investors are already calling Bitcoin a “Boomer Coin” and they are embracing Dogecoin and other Altcoins. The generation gap is painfully visible. Digital natives have a very high willingness to purchase financial services from Big Tech players such as Amazon, Google, Apple and to a lesser extent Facebook. The modern digital consumer is not a king nor an emperor, but a dictator. They don't like your service? Then they swipe you away from their lives in one go, and permanently.
Recently in the US, the SEC severely restricted blockchain and crypto. It's big tech's turn too, says Joe Biden. Big tech also wants to become big in fintech, so that will have an impact. We are seeing even stricter government controls on the other side of the world. The Chinese Central Bank is not only putting Blockchain and crypto under a stranglehold. Jack Ma's Fintech company Ant also saw its IPO blown away. Fintech players are suddenly under the stranglehold of the state.
Power to the people and decentralization of power does not, of course, fit in with China's vision. Blockchain and crypto are seen there as an extension of social credit systems and the surveillance society: controlling the people. As always – and no matter whether it's self-driving cars, blockchain, or crypto – governments can make or break technology with new legislation. So, if regulation bans autonomous cars in the near future, we will still be behind the wheel ourselves. That is good news for the tens of millions of people who earn their living in the transport or mobility sector. They would lose their income with autonomous cars – and need to retrain or game over.
Out of the comfort zone
The companies of the future have a trend-driven innovation culture. For the c-suite in finance, this means getting out of the comfort zone. Take responsible risks and innovate. The 'that's how we've been doing it here for twenty years' culture is fatal in this era. The world will change more in the next thirty years than it has in the past three hundred! So, do you want to be successful, survive and grow? If so, you need digital leadership and cyberpunks. This means on the board, in management and throughout the organization.
The biggest challenge I see for the entire financial sector? Old-fashioned men in suits who still think in the classic, hierarchical way. Let this group switch to Amazon's 'Customer Obsession' model? You can already feel the squeaking and creaking. And customer obsession is more than just listening to them. Having an obsession for the customer also involves inventing and pioneering on their behalf. This is in stark contrast to being risk averse or a trend follower. CFOs also play a major role here. People will have to look in a different way at new business models and the modern population. Have the courage to innovate and invest. This is a matter of culture, mindset and corporate DNA.
Call in digital talent
The financial sector desperately needs digital talent, and people with the skills suitable for the Fourth Industrial Revolution: AI freaks, IoT experts, Crypto talent and digital natives. The big challenge here? Big Tech has been fishing that talent pool for a long time. They offer big salaries, gadgets and a campus where you can ride in, wearing your shorts, on your skateboard and then plop down on your beanbag with your laptop. This offers a much more interesting challenge for a young fast-moving generation than having to walk around in a formal setting in a suit and tie.
After centuries of monopoly, traditional banks now have to fight for their place in the value chain. After the disentanglement of major banks, we now see challengers and neobanks, such as Revolut, Monzo and Robinhood. We are moving from Banking-as-a-Product to Banking-as-a-service and soon to Banking-as-a-Lifestyle or Ambient Banking. Legacy systems need to move to advanced and smart technology and platforms. They certainly have to do that to be able to compete with the Big Tech players.
Time to change course
Were we still giggling about, or looking haughtily down at, those fintech startups? The number continues to grow, with the small fish now forming a large school of piranhas. And we are seeing a number of small fish growing fast. Every year brings 500+ new fintech players and more than 50 billion Dollars is invested in this field annually. Machine learning, algorithms, AI, robots and biometric technology are becoming of paramount importance.
As Peter Drucker so beautifully put it: 'Culture eats strategy for breakfast.' The financial sector is huge. There are many growth opportunities. But things will have to change, and the financial sector will have to compete with the Big Tech players. Because they want to take a big bite out of the pie. I come from the Big Tech corner, and I can assure you, they are going for all of it!
International summit: The Bright Future of Finance
At the international virtual summit The Bright Future of Finance, international top speakers such as Igor Beuker, Craig Baldino and Jim Stolze will update you on the future of finance. Which technologies create new opportunities and business models? Discover which emerging trends are impacting your business. Register here.