28 Signs Your Legacy Bank Is About To Be Disrupted

Is innovation pressure coming from FinTechs under control? The worst may still come.

It’s not just agile startups breathing down your neck; the digital giants (Tencent, Apple, Google, Facebook and Amazon) know their customers better than you know your own. And they all want a piece of your pie. Question is, how will you stand your ground?

Welcome to the second edition of our “28 signs your industry is about to be disrupted” series. This time, we take a closer look at the financial industry and legacy banks. If you’re identifying with these points, trouble may have already found you. Luckily, LHBS is here to help.

28 signs that your legacy bank is ripe for disruption:

1. Every year you hear from the management that the company did great, mastered every challenge, made great achievements. From within the operation, you have a different feeling. It remains a mystery.
2. Your bank thinks it should start being “more digital.” No one ever agreed on what this actually means, so interpretations range from paperless to automated to ‘something’ radically new.
3. Your industry is so well established you believe that no matter how the market evolves, people have no choice but to “need you.”
4. Your management is way more comfortable with “good old” business cases rather than investing in unknown innovation. After all, it has “too little business value.” Why bother if things that have been done before still bring revenue in? At least on paper.
5. There’s so much regulatory pressure out there and compliance rules change all the time. It’s too hard to even remember what it was all about last week. Forget innovation.
6. You spend so much time analyzing your own business problems and organizational issues that you don’t have any time and energy left to care about your customers’ problems.
7. Your bank’s customer age distribution clearly gravitates towards the 60s. Younger folks very often sign up at “must-be minor quality” banking startups, clearly due to lacking financial resources even though those new players have a far better digital customer experience.
8. Your bank mistakes years of banking with you as customer loyalty. Maybe there is just no better option available — yet.
9. Your bank is managed as a cash cow, and financial targets are on everyone’s mind. That aside, there is a lot of talk about customer experience. A lot of talk.
10. Any new, creative and innovative idea most likely dies due to extreme risk-aversion. The surviving ideas of course have already been implemented by at least three other banks.
11. Your bank’s openness to failure and its feedback culture is often celebrated by the management. Yet discussions often end with a statement by the highest-ranked employee in the room, which hardly encourages experiments.
12. When building new services, your bank is obsessed with operational excellence and catching every possible edge case. As a result, huge resources are used for handling special cases, while only a few resources are used for serving the vast majority of your customers.
13. Looking at your tech team’s pace, you wonder who are those people pushing digital change at new FinTech companies. You start questioning if the digital affinity of your own employees matches the one of your customers.
14. Your Product Owner thinks you should get the “Innovator Of The Year” award for successfully implementing the Apple / Google Pay SDK. A year after launch. Slow clap.
15. Your management thinks that offering multi banking after PSD2 will be your differentiating customer value proposition because no one else is doing this.
16. The main requirement for internal agile coaches is that they must have watched all of the Spotify videos on YouTube.
17. Your IT hardly stands a chance against the ancient and complex systems landscape. Countless failed attempts have made everyone sarcastic about even trying.
18. Your colleagues who are tasked with creating great customer experiences know a lot about your customers and communicate this via a PowerPoint within the organization. They never actually leave the building to meet your customers, let alone put themselves in your customers’ shoes.
19. Customer experience is so important for you that you decided to create your own one for each channel.
20. Your up-sell strategy is based around dragging people to your retail branches as a result of a very disappointing online experience.
21. Your bank wants to be more like a startup, but when inventing new products or services you would rather stick to the well-known business model. Monthly paid card fees give a sense of security. Mmh, security…
22. You still hear “sounds great, but will never work here” as an argument against your thorough research and empathy development with actual customers — more often than not from managers who are not the target group.
23. You still believe that all innovation coming from those “small FinTech teams” with no funding, no experience, no proper tech stack behind them, and no customer base is a pure stroke of luck. Sure.
24. You still try to figure out how Revolut or N26 could implement PFM without spending millions on it. Complete mystery.
25. Your Analytics Team still believes NPS is just an optional KPI for developing great customer experience.
26. Your management thinks the future will arrive at your bank once this full Salesforce Suite is up and running. Spoiler alert, this will never happen.
27. The annual highlight of your marketing efforts is the TVC. No one has seen it on Netflix yet, though.
28. Your advisory board thinks that the best way to invent the future is to send your top management to Silicon Valley to visit Facebook and Google.

Do these statements sound familiar? Which signs reflect the current reality at your legacy bank? If you wish to chat with us about our experience helping legacy banks to create and capture value for customers in the digital age, just get in touch.

We work with financial services companies across Europe; from inspiring Keynote presentations on innovation strategy to hands-on support for developing innovative products with agile teams.

Reach us directly at hello@lhbs.com