We are in a time of unprecedented change and there is a lot of noise and activity around innovation at the moment. In my industry the wave of fintech startups are challenging status quo and the way big banks and consumers carry out financial tasks continues to gain momentum. Every part of the banking service sector is being disrupted and as a result, what may have helped an organization be successful in the past could potentially be the cause of their failure in the future. Companies need to adapt and evolve to meet the ever changing needs of their constituents or at least die trying.
When I talk about the importance of innovation I like to refer to a quote of a Louisiana State University business professor:
“It is not the strongest of the species that survives, nor is it the most intelligent, but the one most responsive to change.”
Leon Megginson is summarizing the central idea outlined in Charles Darwin’s “On the Origin of Species”.
For thousands of years living things may remain the same and not evole but at some point there will be changes in their material ecosystem that will force them to adapt or end up being extinct (think dinosaurs).
Organizations face the same struggle for life. When its environment changes as when customers, regulations, technology or competitors changes, it has to evolve or risk becoming redundant or obsolete (think Blockbusters).
Digital disruptores are everywhere breaking the dominant business models and redefining entire industries. The world’s largest car provider owns no vehicles (Uber) and its largest accommodations company owns no real estate (Airbnb). The same disruption is happening in banking. Banks are no longer the owner of the end-to-end-chain anymore. You don’t need a bank to raise funds. You don’t need a bank to buy or sell currency. You don’t need a bank to get a loan.
In a world where empowered, always-connected consumers expect to interact with companies in real-time – and no longer rely solely on traditional channels – banks cannot be focused on today but they need to start thinking about serving the customer of the future.