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Jo Ann Barefoot explores how to create fair and inclusive consumer financial services through innovative ideas for industry and regulators

The Future of Banking with Chris Skinner

Barefoot Innovation Podcast

The Future of Banking with Chris Skinner

Jo Ann Barefoot

Innovate Finance 2019-009.jpg

We’ve been backlogged on Barefoot Innovation because, as I explained in our last show (and 100th episode) we’ve had a frenzied summer schedule launching our nonprofit, the Alliance for Innovative Regulation (AIR), and hosting the first-ever US financial regulatory hackathon, in collaboration with the UK Financial Conduct Authority. As a result, we’re catching up on some great conservations we recorded last spring.

For this one, my guest is the one-and-only Chris Skinner. Chris, the CEO of the Finanser, began writing a daily blog in 2007. Every single day since then, for twelve solid years, he has written a blog post. It’s said that journalism is the first draft of history. Chris has written that daily first draft of the history of fintech, almost from the start. He’s the bard, or minstrel, or troubadour of fintech, telling its story as it has unfolded in real-time, day by day, with all its twists and turns and surprises. He’s been the one seeing the patterns and understanding what’s happening and what is likely to come next.

He’s based in London, which means that for me (I’m usually in Washington DC) that his daily missive comes with my morning cup of coffee. I read it and, most likely, I tweet it. I have a great deal of company in this: Chris has nearly 50 million followers on Twitter.

Chris and I recorded this conversation last spring during the Innovate Finance Global Summit in London (one of my favorite conferences in the world). We found a reasonably quiet corner of the bustling speakers’ lounge in one of the old Guildhall buildings and talked about the future of banking.

One of the things I love about his insights is that he neither predicts the demise of banks nor sugarcoats the challenges they face. He does believe -- as do I -- that banks that are too slow or aim too low, in digital transformation, aren’t not going to make it. For those that do transform, though, the future is bright.

Chris buckets the banking industry into four categories of positioning on this journey: working out what to do, working out how to do it, doing it, and then doing it better, continuously improving. (For the bankers listening, I urge talking with your colleagues about where your institution falls in that sequence.) 

In our talk he offers a lot of advice on how to advance along this continuum. He points to banks that have redefined themselves as technology companies, and he names names of banks that are doing it well. He says banks need real technology talent -- he says JP Morgan has 50,000 engineers. He says the technology people have to work alongside the business people -- break down the silos. (He says at JP Morgan Chase’s asset management and trading space, every single person has to learn how to code.) He talks about the need for banks to be in the cloud, and to be agile, and to keep those teams small and nimble. He cites Jeff Bezos’s benchmark: if a team needs more than two pizzas for lunch, it’s too big.

Chris also points to banks’ natural, hard-won advantages, including that for certain things, people trust them. They can leverage that. It won’t be enough, though, to keep them competitive in a digital-first, mobile-first world.

I vividly remember the Finanser blog post that I read over my coffee on May 11 of last year. Chris called it Small Bank Thinking. He recounted an event where he’d recently spoken with small bank leaders. They had told him all the many reasons they can’t change quickly and all the reasons they have disadvantages compared with large banks. The post has a “tough love” quality. It’s blunt -- even harsh -- about the traditional banking model and mindset. At the same time, though, it’s profoundly optimistic for small banks that do change. Chris thinks small institutions are not at a disadvantage. He thinks they actually have an advantage over the giant competitors that are trying to turn enormous battleships, while nimble little motorboats could potentially run rings around them. He thinks the answers are much more about mindset than budget.

We also talked about regulation. Chris says the average US technology company must satisfy 27,000 regulations, while the typical US bank has to comply with 128,000. He notes that there are some good reasons for this, but he thinks regulators are going to have to lead on innovation, not follow it.

We also talked about financial inclusion. He says that when he wrote about the unbanked and underbanked a decade ago, he was writing about roughly 4.5 billion people, out of the seven billion on earth. Today, he’s writing about 2.5 billion people. That’s still a huge number, but think about that progress in just 10 years. He ends our conversation with the amazing story of the founder of Paytm, who once was homeless and now is a billionaire in India. That is what this fintech is doing, opening opportunity for everyone, all over the world.

I know you’ll enjoy my conversation with the Finanser, Chris Skinner.



More on Chris

Chris Skinner is widely known as the most influential person in technology in the UK. He is an independent commentator on the financial markets and fintech, through his blog, the Finanser.com and as the author of bestselling books -- Digital Bank, ValueWeb and Digital Human


Chris is Chair of the European networking forum, the Financial Services Club, and Nordic Finance Innovation. He is a Non-Executive Director of the Fintech consultancy firm 11:FS.  He serves on the Advisory Boards of many companies including B-Hive, Bankex, empowr, IoV42, Innovate Finance, Life.SREDA, Moven, Meniga, Pintail, Project Exscudo and the Token Fund, He has been voted Game Changer of the Year and Financial Markets Advisor of the Year by Finance Monthly; CEO of the Year 2018 by CV Magazine; FinTech Speaker of the Year 2018 by TMT Global, FinTech Author of the Year 2018 by Acquisition International; Best Financial Markets Adviser of the Year UK, Global 100 – 2018; Most Influential CEO of the Year 2018 – UK by CV Magazine; Most Dynamic in Finance Advisory Services 2018 – France by Global Business Insight; Best Financial Markets Adviser of the Year 2018 – UK by Corporate USA Today; Best CEO of the Year 2019 - UK by Lawyer International; Best Financial Markets Adviser of the Year 2019 – UK by M&A Today; Most Influential Fintech Advisor 2019 - UK by CV Magazine; Best Financial Markets Adviser of the Year 2019 – UK by Corporate America Today; and Best Fintech Keynote Speaker 2019 – by Global Business Insight. He has been an advisor to the White House, the World Bank, and the World Economic Forum.


Links

Books by Chris Skinner:


More for Our Listeners

I hope you enjoyed today’s show. Remember to leave us a five-star rating on your podcast platform so we can help more listeners find the show. Also come to our website to subscribe to Barefoot Innovation -- our newsletter, podcast and updates, and please follow me on Twitter, LinkedIn, and Facebook, and please send in a contribution to support our efforts to bring you the insights of people like these.

We have great episodes coming up. We’ve talked with Karen Mills of Harvard Business School. This is our second show with Karen, too, and one we were eager to do because she has a new book out on fintech and small business. We recorded a fascinating show with Ida Rademacher of the Aspen Institute alongside Jamie Kalamarides of Prudential.  

We also have a terrific conversation that we recorded in April from the expo hall at LendIt with the cofounders of Kabbage, Rob Frohwein and Kathryn Petralia.

If you’re interested in booking me to speak to your group, contact jay@provokemanagement.com. And I hope to see you at these events:

Some events where I’ll be speaking this fall are:

  • Massachusetts Bankers Association conference, September 26, Stowe Vermont

  • University of Michigan’s Central Bank of the Future Conference, October 2-3, Ann Arbor, MI

  • Money 2020, October 27-30, Las Vegas, NV -- I’ll be chairing the regulatory track again this year and also keynoting the day, which has been moved, happily, to Tuesday. We will have an amazing line up for you in our sessions as well as luminaries on the main stage, so stay tuned!


Also, we have proposed two events for SouthBySouthwest next year, and they have just opened up their “Panel Picker” app to let people vote. We want to hold one on the regulatory “moonshot” -- the unbelievable progress being made in regulation innovation. I also proposed one called “Never Fear,” telling the story of my own transformation from having a pretty traditional career into focusing on technology, and the life changes that accompanied it. Please give our proposals a boost by voting for us. The deadline is August 23rd.

 
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The views and opinions expressed during the Barefoot Innovation podcast series are solely those of the individuals involved and do not necessarily represent those of Barefoot Innovation Group and its employees. Barefoot Innovation Group does not verify for accuracy the information contained in the podcast series. The primary purpose of this podcast series is to educate and inform.