Chris Skinner is well known for his extensive writing, speaking and advising on the disruption necessary in the banking and fintech worlds. He’s proud to be a self-proclaimed troublemaker because “the more trouble you make the more you can fix things.” In this week’s conversation with Eric, Chris explains everything from why he focuses his lens so intensely on the future, to why the financial world isn’t as complicated as it might appear. He also explains the mechanism behind his staggering productivity and offers a truly global perspective on purpose-led banking.
Chris’s next book – Digital For Good, If You Don’t Stand for Something You Fall Down – to be published in the second quarter of 2022 – will provide an in-the-round global perspective on purpose-driven banking and finance.
It’s a conversation you won’t want to miss.
For more from Chris visit The Finanser and Chris Skinner’s website. To learn more about Chris’s children’s book series, Captain Cake and the candy crew, visit CaptainCake.com.
To listen to this conversation on your preferred streaming platform, click here.
Transcript
Chris: If you're looking at tomorrow's business, which is why I'm always future focused, you have to think about where's the customers today and their journeys and experiences? And where can we take them tomorrow to create better journeys and experiences, and then bring that inside the organisation to design product and design around the customer needs.
Eric: I'm Eric Fulwiler. And this is scratch, bringing you marketing lessons from the leading brands and brains rewriting the rulebook from scratch for the world of today.
Hey, everyone, my guest today is Chris Skinner, CEO of finance limited a research and media firm focused on FinTech and the future of finance. He's also the chair of the Nordic future innovation group. He's a non executive director of Illumina fast my previous company, and he's on the advisory board of many FinTech and financial services for firms. He's considered a forecaster and a FinTech and banking thought leader. He's been an advisor to the White House, the World Bank, the World Economic Forum, the United Nations. He's also a TEDx speaker. He's been voted a top 40 Most Influential People in FinTech by The Wall Street Journal, and one of the most influential people in banking by the financial brand. So if you are in the world of financial services, or FinTech, I'm sure you already know about Chris, if you're not, I'm excited to introduce you to him today. He's someone who is very well known at this point for being a thought leader on all things digital transformation and innovation in the world of financial services. But really, as you'll see, in our conversation, the principles and practices that he talks to bankers and insurance companies and Fs organisations about, they really apply to any organisation. And Chris actually has a background in marketing. And so while a lot of the conversations he has week to week with these executives, is focused more on kind of product and technology, innovation, it applies to marketing, just as much. So we talked about a bunch of interesting stuff. He, he's a self described troublemaker. And so we start the conversation with him talking a bit about what that actually means. And it sounds a little bit silly, but it's actually really important. He talks about how to shine a light on what might be broken, or what opportunities might be out there. Because you need that awareness before you can actually change anything. We spent a lot of time talking about culture and mindset. It's his belief as it is mine, that that is really where any real and sustainable change comes from. So we try to get into the nitty gritty of well, how do you actually rewire culture? If you're in an established business that needs to change? Or how do you set culture up the right way, if you're in a new business that's preparing for growth, we talked about his perspective on the differences between challengers and incumbents. And we talk a little bit about his next book, and a lot of the conversations and talks that he's been giving more recently on the role of digital, and banking for sustainable finance, and the importance of that. So please enjoy my conversation with Chris Skinner.
Hey, before we get to today's episode, I wanted to take just a second and ask a favour. If you're listening to this, I really appreciate it. This is a new podcast, we arrival our new company, it's hard to get this all off the ground. And I really appreciate the support to ask an even bigger favour of you. If you could please, if you're enjoying the content that we're putting out, if you've listened to a couple episodes, or even if you're new, could you please take a minute to share scratch with someone else that you think would enjoy it? That would mean so much to us get the word out, start to build our audience. I'd really, really appreciate it. So if you could just take a minute, you can pause this. Just think about is there someone else out there another marketer who you think would find this content valuable? And please send this along to them. I really appreciate it. Now onto the episode.
Hey, Chris, how are you doing?
Chris: I'm pretty good. And welcome to 2022.
Eric: Yeah
ChrisL you know, it's gonna be an exciting year, much better than the last two years, I think.you know, it's gonna be an exciting year, much better than the last two years,
Eric: I'm excited. This is my first recording of 2022. So I'm gonna set a high bar.
All right, so let's get into it. I've got a few notes here. Obviously, we've known each other for a little while you are an advisor and sit on the board of 11 Fs and that's where we first crossed paths and had a few conversations while I was in that world. So I was really excited to get you on board today. Obviously, I know and probably some of the people listening know a lot of your perspective on digital transformation on innovation on the opportunities and challenges of digital more broadly within the world of financial services. But I think well I know that there's a lot that you have to contribute to what that means to marketing and growth and brand and everything that that we work on and that I think a lot of our audience is interested in hearing from you as well. So I thought we could kick it off with a bit of a icebreaker cheeky question for me, which is, on your bio on LinkedIn, you describe yourself as an author, speaker and troublemaker. I'm curious if you can unpack the troublemaker brand that you've given yourself and what what that means to you.
Chris: Yeah, I mean, I was accused of being a troublemaker by one of my banking clients, because I provoke and stick my finger and my writing into areas that other people don't. And it's the beauty of being completely independent. So I have no employer, I just, I'm me. But because I've got quite a lot of experience around technology and finance, I can see where things are going wrong. And I highlight them and I shine a light on them. And I basically say, You gotta fix this, which a lot of people don't talk about those things, because they have employers and sponsors, and they don't want to get into an argument with their clients or the industry. So yeah, I am a troublemaker. And I'm actually quite proud to be that because the more trouble you make, the more you can fix things.
Eric: And so do you, I guess, in thinking about being a troublemaker, you know, you're shining a light on these things that people need to pay attention to. And then you're also helping guide them in how they actually make those changes and make those fixes as well. Right?
Chris: Yeah, I mean, a lot of the time, I'm saying to the industry, particularly the banking industry, but also to the FinTech industry, here's the things that you don't know. And here's the way in which you probably need to have some guidance. And a good example of that is my last book is doing digital. t what I felt was everyone is saying banks are dumb and stupid. And I know they're not because they've filled with talented people. But they don't know what to do and how to do it when it comes to digital transformation. So I tried to give them lessons about the guidance to achieve digital transformation. I think that's really where the bottom line is, which is, it's easy to criticise an industry and say it's dumb and stupid. But then you have to come up with solutions and guidance. And if you don't have that second part, then you're just throwing rocks.
Eric: So I'm curious what what does a day in the life week in the life of Chris Skinner look like? These days? Because I think that, you know, people would have heard my intro on you and a bit of your background. And for anybody listening in the world of financial services, I'm sure they already know about you. But maybe for those who don't, you could just talk a bit about, you know, what you actually do as an author, speaker and troublemaker week in and week out right now?
Chris: Well, before the pandemic, I was flying around nonstop around the world, presenting and giving keynote speeches and talking to banks and technology companies about the way in which they should develop. Since the pandemic, I've been doing lots of zoom, as you can imagine spending all my time in this room. So zoom in a room. Like most people doing a lot of writing, developing a new book, in fact, several new books. So since the lockdown started in March 2019, no 2020. So give me that dates wrong. I've actually produced 8 books. And I blog every day. So basically, I sit every day writing, thinking, talking, speaking,
Eric: Do you have a system for enabling that level of productivity? Because it's a tonne of output? And so obviously, you need the time to be able to do that. But I'm curious, like, Do you have any hacks or rituals that you could recommend to people who want to be producing more content of the level that you're doing?
Chris: I think there's a number of things that I've learned as muscle memory. The first is, every single day, I have to say to myself, I must write something about the industry which I put on my blog, the finance a.com. And so every single day, I produced 500 to 1000 words on a topic. And every two years that's then edited into the business books. Which of the newest one is going to be digital for good, which is the 17th of my business books. And it's just that discipline of saying every single day, you've got to do this. And some days it's difficult, some days it's easy, and so On days, you do take off, you notice. So it's but at the end of that discussion, I just guarantee that every single day, you will see something on the finance calm that hopefully makes sense to provoke and make trouble and give guidance. But then complete aside is that during the lockdown, I've got two twin five year old boys that when it started were four years old. And I ended up, which is the other books that I'm producing, creating a series of children's books about Captain Kagan, the candy crew, which gives me an alternative direction. And so when you talk about the level of productivity, it's really being curious, always wondering what's going to happen in the world, always looking to the future. You know, I never look at the present or the past, I'm always looking at what's next. And being stimulated by family and friends and the world around us.
Eric: So a lot of what you're known for a lot of the content that you put out, is focused on. And again, you know, please elaborate on this, if I'm not explaining it well, but kind of digital transformation in general. But you also have a point of view. And I know you have some experience in marketing roles, as well, I think you were the VP of Marketing and strategy in one of your roles before you kind of set out on your own. So I'm curious, I guess one, how much of the conversations and the talks and the content you do apply to marketing? Or are people asking you about that? And if not, how do you think about these topics, trends, opportunities, and applying them to marketing innovation? Specifically?
Chris: That's good question, Eric. Because, you know, I don't give it away, often. But I spent my whole career in marketing. And the thing that I learned very early in my career, I work in a technology company is a lot of the technology companies were giving features, functions, and technical briefs about the product to the industries that they were trying to serve, rather than looking at what the customer actually needed. And I actually, when I first started marketing, had spent a couple of years before that giving technical support to customers, writing code and sitting with them and no offices. And so I always had this outside in view of how the product should serve the customer. Whereas when I got into the head office of marketing in a big tech company, they had this Inside Out View. And I think this is where a lot of people get it wrong. Because what I try and do and I've always done this throughout my whole life of talking to customers about technology is dumb it down, not trying to make it stupid, but make it something that my mom or my children could understand. So simplify the terms. And one of the consistent things I do by way of example is on my blog, whenever I use an acronym, I first of all give the full term and then brackets, the acronym, so distributed ledger technology, brackets, DLT, and I do it on purpose, because if someone's not in this industry, they wouldn't understand it. And I've discovered the same thing in banking, actually, which is a lot of the complexity of banking, particularly investment banking, is because they have these acronyms and terms that no one understands, like collateralized debt obligations, CDOs, or mortgage backed securities MBS is, and the more you use acronyms, and where you confuse people as a marketing guy, my job was to tell stories, number one, but secondly, to make sure that the story could be understood by my mum or my children.
Eric: Yeah, and a lot of a lot of how I think about it is, you know, the connotation that most people have to marketing, even people that are in marketing roles, and in the marketing industry, is they think about the communications piece of it, the promotion, within the four Ps of marketing, how you bring the product to the consumer, but actually, the role of marketing is to connect the product and the consumer or the consumer to the product. And I think if you take a step back and think about marketing, in that sense, gives you a much broader role and remit and you need to understand the job that the product can do and the brand can do in the world of your consumer in order to build effective marketing. And so, you know, I think there's so a lot of organisations that are more inward focused, as opposed to outward focus with how they think about marketing, but it's changing and in large part because of challenges and in the world of financial services, FinTech for sure, has challenged the traditional way. A big banks, big insurance companies, big Fs organisations and how they do marketing to be more customer centric. So I really believe that growth comes from innovation on the product side and the marketing side. And some organisations are more led by one than the other. But it's, it's interesting, interesting is not the right word, it's, it makes a lot of sense to me, that you have a marketing background and bring that perspective to the table, even when you're talking to people about general business transformation, or product innovation. Because I think a lot of it, a lot of it comes down to that it's understanding the consumer, connecting the product to the consumer in a way that's actually going to solve the needs that they have.
Chris: Yeah, I mean, from my side, it's a number of experiences. So a lot of technology, traditional technology, in particular, and financial institutions think that marketing is about mugs and mouse mats, it's just airy fairy fluff. They don't understand actually, marketing is all about creating tomorrow's sales and tomorrow's growth, which is what I place it. And if you're looking at tomorrow's business, which is why I'm always future focused, you have to think about where's the customers today and their journeys and experiences? And where can we take them tomorrow to create better journeys and experiences, and then bring that inside the organisation to design product and design around the customer needs and don't ask the customer what they want. They have no idea you know, and we've heard this so often from Henry Ford to Steve Jobs, you have to look at what can we do to do a business model of three to five years that will be far better than today's model and the competitors model that one of my favourite stories is when a UK retailer Tesco, in the 1990s launched their first hypermarkets stores. They innovated the design of the store. And when Sainsbury's and Asda and others tried to catch up, they every 18 months had the next wave of innovation. And it was planned from the start and on a continuum, and then develop further and further. And I think that's one of the big secrets of marketing that you you don't just plan for the next rollouts you need to plan for how do we keep that momentum through the next decade or more.
Eric: One of the quotes one of the headlines from your most recent book, doing digital that I loved and really stuck with me was if we don't transform, we die. All companies need to rewire their culture and mindset to leverage digital technologies, you can no longer just add these to the organisation. So I think that I'd love to hear you expand on that. And obviously, it's what you were just talking about that kind of constant innovation. But how do you actually do that? You know, you've got so much experience within organisations, but also talking to so many organisations, what have you picked up? And what can you recommend to people listening about how you actually rewire culture and mindset to make sure that you can deliver constant innovation?
Chris: Well, I'm quite lucky because because I've been doing this for so many years, I'm at that intersection of finance and technology. And so I know a lot of the big financial institutions and the last book doing digital, I was interviewing JP Morgan Chase BBVA, ing dBs, China, Merchants Bank, and they allowed me through the doors to meet their C suite and interview them in depth. But at the same time, in previous books, I've interviewed, you know, ripple and Stripe, and many of the leading FinTech startups and challenges Monzo, Starling, etc. So I can see both sides of the equation. And the big challenge for a traditional institution is that they've added technology sticking plaster onto what they had before. And they have to rewire it. And the way I describe it is, you know, banking was invented in the industrial revolution for the distribution of paper through branches with buildings in humans. And now they have to rewire for the digital distribution of data through software and service. And that's incredibly difficult because they weren't built that way. And it's turning the institution on its head. And that in doing digital, the lessons that I guess, came out of that is you have to run the bank and change the bank. And you need two different teams to do that. And the biggest mistake is to launch a separate bank because what were you doing with the old bank, you're just gonna leave it high and dry to wither on the vine. For the FinTech firms. They equally have big challenges because they have no history and no trust and they have to build from small seeds. Businesses that were works well. And I tell them typically, don't try and do what banks do try and solve what banks do badly or do something that banks don't do. And the ones that are succeeding the most like Stripe, are solving the issues of how to deal with institutions and finance and payments in the new network digital world which banks have not solved.
Eric: Hey, everyone, just a quick note to say that we have partnered with Attest a powerful consumer research platform to produce our own proprietary research. And each week, we're highlighting a stat from a recent attest report that's relevant to the conversation that we're having with our guests. So for today's episode with Chris Skinner, just a quick stat taken from the UK sustainable Finance Report, which says that Brits underestimate the impact that financial products can have on the environment, only 6% of people think changing, where they invest their money would have the biggest impact on reducing their carbon footprint, this action was ranked as the least impactful just below becoming vegan. So as you'll hear, in this conversation with Chris, he has something to say about that. And you should head on over to askattest.com if you want to see more of this research, you can also sign up to run a free survey to access 110 million consumers in 49 markets to remove the guesswork from your business growth.
So the you know, it's interesting what you were saying about new needing to run the bank or and you can apply this, I think to any incumbent established organisation that needs to transform, in order to stay competitive long term, you need to run the business as well as change the business. And it's the it's the, you know, it's the classic innovator's dilemma of you need to continue delivering on the short term while also repositioning yourself to take advantage of the long term. But if I'm picking up on what you were saying you were kind of challenging the model of the innovation group or the innovation salad, the flanker brand and business, which you know is a lot of what these big is certainly in the world of banking, but also in other in other industries, what a lot of these organisations are doing, it's a lot of what we did and what at 11 a fast and what they still do. And obviously it's more than that, but building these kinds of Challenger or Neo propositions as a innovation cell a separate but connected part of the of the kind of mothership organisation. So if you're kind of recommending against that, or maybe if if there's a certain way that you should go about that, what is the alternative? How do you run and change at the same time if you don't take that approach?
Chris: Well, I think the key lesson that came out of the book, and the interviews I was doing was when I met with DBS as CEO, PH Gupta, and DBS is a big bank in Singapore, that in the 2000s was called Dead bloody slow, but is now the leading digital bank of the world may be some acclaim. And what happened is, in 2009, pH was bought into the bank as chief executive. And in 2011, they tried to acquire a bank in Indonesia, with a 350 Singapore dollar budget, three 50 million Singapore dollar budget, and the acquisition failed. And the board of directors then said to pH, look, we've got this 350 million Singapore Dollars, why don't you take it to change the bank and to refresh the bank. And that the advice they gave him is, don't focus on running the bank will get the CFO and COO to run the bank. But you and the chairman need to change the bank. And so they gave him the charter, to not have to think about running the bank delivering the quarterly results or the revenues and profits, but just to focus on, you know, change us to be more competitive and to be a brand new bank. And then he spent about five years bringing the whole bank onto a single platform core system that was refreshed. At the time, they were running a big mainframe system from a large company with a three letter acronym. You can probably guess too. that the advice they gave him is, don't focus on running the bank will get the CFO and COO to run the bank. But you and the chairman need to change the bank. And so they gave him the charter, to not have to think about running the bank delivering the quarterly results or the revenues and profits, but just to focus on, you know, change us to be more competitive and to be a brand new bank. And then he spent about five years bringing the whole bank onto a single platform core system that was refreshed. At the time, they were running a big mainframe system from a large company with a three letter acronym. You can probably guess too. And it was going to cost them billions to refresh the mainframe system. And so pitch kind of botched that. And they put a lot of budget into single platform across all countries, actually, at that time using Terminus. And then the second wave was moved the whole thing into the cloud. And so 80% of the bank is now cloud based. Whereas if I talk to other banks, I'd be amazed if they're more than 25%. And I'd be amazed if any of their core systems were in the cloud, most of it is actually shared services like payroll, Human Resources marketing. So, there, they were a standout for me and a lot of people in Singapore, actually are quite cynical about their story. But the thing that really got to me is every person I met there was consistent in the story at whatever level, whether it's Treasury audit, compliance regulations, credit marketing, deposits. But more than that, I met the chief financial officer. And it was 30 minutes into conversation, when I had to just stop and say, you haven't mentioned shareholder once. And she said, Well, the customer is the most important if the customers happy, and the people are happy in our business, and we deliver joyful banking, then the shareholder will be happy. And that was a standout. The problem I have, and this is a problem of every bank, in the book that I met, is how do you get that to be recognised from the investment community because the investment community don't recognise digital transformation as investable right now, amongst peer banks, because I see them all as being the same. And, you know, Goldman Sachs, for example, with Marcus, which is the newly created Consumer Bank, find it very frustrating because they've got far more success than Monzo, or chime or new bank even, which are the challenges are doing really, really well and worth billions as unicorns. And yet, Goldman Sachs doesn't get that recognition. And the reason is because their view disappears against JP Morgan Chase and the the rest of the pack, they're not viewed as fintechs.
Eric: I really like that anecdote of DBS and that case study, and how they because I think run and change is really good way to think about a short term long term, how to actually give the mandate to the CEO, to innovate and change things and carve out part of his or her leadership team to actually run things. And actually, you know, I would imagine a lot of the incumbent businesses that have been able to transform and innovate and stay at the top of their game probably have a similar dynamic, I think of a quote from Jeff Bezos, where I think he said, I think about two years ahead, I have people who work for me think about one year ahead, and they have people who work for them, who think about the year that we're actually in right now. And then also, you know, working for Gary Vaynerchuk, for a long time, he used to say that the most important job of the CEO is to put the existing company out of business before somebody else does, which is really a lot of the ethos and energy that we're trying to bring with the work that we do at rival. Obviously, we're just focused on the marketing side, not kind of the general business strategy or the product innovation. But I really do believe that every business not only can be a challenger, but should be a challenger, because if you are the true challenger, you are trying to innovate against an established incumbent industry. But if you're the incumbent, then the best way to actually stay relevant and to innovate is to think as if you were a challenger. So I really like I really liked the way that they did it. And I think that's an interesting case study an interesting alternative to the CEO focusing on running the business and then giving the mandate to a separate innovation group to try to do the change work. I'm curious, I was having conversation with someone yesterday. One of the things that I really believe is that when it comes to digital transformation, the best strategy, the newest technology doesn't matter. If you don't have the people, the right people on board set up in the right way to actually make those changes and sustain those changes. So it really comes down to talent and culture. And you even you know, talking about rewiring culture and mindset. I'd be curious to hear if you agree with that, or maybe you can expand on that a little bit. But the conversation I was having with this person yesterday was I think there's few people that would disagree with that. Now, the hard part is in the execution of it. And so how do you actually build a culture that is amenable to this type of thing? And for me, you know, maybe it's an overly simplistic answer. But the truest and most important things tend to be very simple, in theory, but hard in practice. I think a lot of it comes down to leadership, it comes down to the board, it comes down to the CEO it comes down to and everything that we're talking about, by the way, can be applied to any level of leadership. You know, having the CEO focused on change could be the same as having the head of marketing focused on change, and then having people on their team focused on running and delivering in the short term. But what do you think about the actual practicalities of creating and sustaining a culture that enables this type of thinking and action, especially if you're within a larger organisation that maybe doesn't have it as natural As a startup or challenger would.
Chris: Yeah, I mean, it's a difficult thing. And it applies to all industries, not just banks. How do you change the culture for digital transformation, business transformation, and it's nothing to do with technology. It's all to do with mindset and culture exactly as you just alluded to. Just give you an example, one of my favourite blogs that it's pretty one on one on one of my most read ones, was the best job in the world is to be the chief cannibal officer, with the role of cannibalising everything, stick your finger in challenge everything, ask why you do it this way is stupid. Going back many years ago, I was doing business process reengineering and transformation in insurance and financial companies. And in one particular London insurance company, they were taking documents through a process. And at one point in the process, the documents always just sat on a desk and never got looked at and then moved on. I said, Well, what is that desk? And they said, that's the international desk. And I said, Sir, why is documents going to the international desk, and they're sitting there and said, well, we don't do that international business anymore. And you know, and that's the way you challenge things, just say, that's holding things up, it's stupid. We're having a challenge around how to get this cultural mindset change. And so they had a meeting of all senior management, and being a Danish bank, said that they were being acquired by a Swedish bank. And, surprise, surprise, the Danish and Swedish don't really get on that well. So this was, like, you know, France, taking over Britain, it was going to everyone was in tears, it was terrible, that was distraught. But the deal was done. They had to work out how it's going to be merged and integrated. And the chief executive, and the chairman, kept up this pretence for the whole morning and then at lunchtime said, That was a joke. But now, you know, you've been disturbed. Now, you know, you've got to change. And you need that pressure, you know, you need the burning platform to get people to wake up and shake up. And then they reinvented the bank, saying, This is where we want to get to, how can you help us get there. And I think a couple of other quick key points here is, you can't tell people how to change, people need to tell you how to change, then they get the cultural participation and buy in. Whereas if you force it upon them, then they're alienated and they buy out. So you have to get everyone participating. And equally, when you're doing this, everyone's frightened of having their cheese moved, and they might lose their job, and they're no longer relevant. And so you have to reassure them that they can be reasonably skilled and rewire themselves. You know, one of the my favourite things in the large companies where I've seen this working is they offer people the ability to spend three months or three weeks or three years, however long it takes to rescale and rewire to be part of the new new organisation. And you know, in previous books I've cited, for example, the bank here in Poland, where I live and bank, which was formerly Bre bank, and they transformed into one of the leading digital banks in Poland, didn't lose one member of staff. And yet, most of those staff are now programming in Python, rather than working in branches.
Eric: I think, any real change needs to be delivered both top down and bottom up. So there needs to be some type of overarching story, strategy, pillars, values, whatever it is, that needs to be communicated top down. And the bigger the organisation, the bigger the scale chain, the simpler and clearer that communication needs to be. But it also needs to be bottom up. It needs to be the little things, the one on one conversation.
Chris: I mean, ING described it quite brilliantly for me, which is they were formerly 30,000 employees and a large organisation. Now there are 3000 teams in a small organisation. And what they mean by that is that each team is in a microservices architecture structure where they have design developers all working together with auditors and compliance and regulatory people and credit people. And decisions are made same day you know, you don't, you don't wait ages and people talk about Agile and Lean. What. In practice that means is fast moving being inflexible.
Eric: Yeah, yeah. And I guess that's kind of what I'm getting at is, you know, these, these big, sweeping statements about culture change, it's about leadership. It's about the DNA of the organ like these things that are very intangible in theory, I think part of the way of making them become tangible and real, is by changing some of the small things that happen day to day, it doesn't always have to be rolling out new values, or restructuring the entire organisation, it can be just like looking at the process of what happens day to day, week to week, and making you know, those 1% type of improvements, that pushes an organisation to be more open to innovation pushes them to move faster, and be more flexible and agile. So, you know, these bigger, I think it's sometimes easier to go out and buy the new technology, or to roll out a new strategy. And when it comes to culture change, and people change, it can be the harder thing to do. But if you break it into the pieces, the sum of its parts, and just get started getting started on trying to push some of these changes forward, I think you can actually make real progress that way.
Chris: Yeah, I mean, actually going back to the last century, when we were talking a lot about business process reengineering. The challenge in all organisations that I was dealing with, then show my age, again, was that in the financial industry, it's all about command control. You don't empower people because you need to ensure risk compliance checks. And one company I was talking to you about this said, we've bred a culture of box tickers, and button pushers, because they can't think we remove their brains as they walk into the building. And equally, they've talked about the frontline staff as though it's an army with troops, which is command control. And the debate we were all having was how can we move to a coach Council organisation that's far more maternal and family structured, rather than being paternal and control structured. And I think this is a critical point around agile lean and culture that we're touching on now, which is, nearly all the organisations that I'm seeing working well today have moved to a flattened lean organisation with direct decision making in a fast structure, which works well. Not all organisations in FinTech or in banking are there but a lot of them are moving in that direction. And technology enables that and it's actually been accelerated in a pandemic, because we are working from home means that people are working in a far more family structured and formal linked organisation than the one where everyone sits in a particular floor depending on their seniority and a headquarters. And so that there's this big change between command control and coach Council, which the organisations that are geared up towards the latter, to be family centred, and to bring everyone into the organisation on an equitable basis rather than a patronising basis, we'll succeed far more in the next decade than the ones in the former camp.
Eric: So Chris, you sit in a very interesting position in the financial services world. And by that, I mean, you're kind of at this intersection between the world of FinTech and the world of incumbent banks, traditional financial service organisations. So I'm curious, taking a bit of a step back and through either the general transformation innovation lens, or anything that you can comment on regarding marketing and growth more specifically, what are the key differences that you see at this stage within the financial services industry between the FinTech challengers and the AFS incumbents?
Chris: Well, that's it clear delineation between the two and that the FinTech companies are typically very young startup companies that don't have any of the technical depth and baggage that the old companies have. But equally, they start with no trust, no brand, no customers and limited capital. So their challenge is to get through the series A Series B, fundraising rounds and keep themselves funded and growing and successful. And often there can be stumbles in the road, particularly a pandemic that can trip them over. So it's not easy for them, but many of them are getting there. But when you think about how many FinTech companies that are successful, can you name and then I say there's 25,000 FinTech startups around the world. Called context. You know, it's not every one that succeeds.Unknown Speaker 39:54 For the incumbent banks, they've got centuries of history, millions of customer billion is a capital. And so they can pretty much wipe out most fintechs if they wanted to, just by buying them or copying them, or pulling their funding away from them. But their challenge is that they have this static cemented legacy technical debt culture that can't turn around. And the real thing that comes together between the two where I see the most success is, as I mentioned earlier, if fintechs can solve things that banks do badly, or things that banks have never done, they will be successful. If banks can turn around the culture and get a more agile, flexible, lean, flattened organisation structure that's with the mindset of being digital, then they can work well together. And in that case, the fintechs, and the banks will start coming together and working together. And that's the big trend right now. But the biggest thing that for me is in the intersection today is the I've talked banks for a long time, that their technical depth is bringing them down. And what I mean by that is that they haven't refreshed and replace the core systems, they've just added to them, and now they've cemented them in. And the challenge today and for the last decade has been how can we get away from these cemented legacy systems and move towards agile and fresh systems? And they should have been doing that in 2010. If they're still talking about their 2020 I think it's too late. Because in 2020, the trend that's coming through today is a lot of the FinTech firms are talking about how can we use finance and technology to do good for society and good for the planet, and become more sustainable, renewable and green? And for Gen Zed and millennials, that's a huge topic, which is how can we get financial services institutions to invest in protecting the future of the planet. And I see figures all the time, but the number of times I see PR and marketing, parts of the traditional banks talking about being green and sustainable with corporate social responsibility and ESG, environmental, social governance. And then you look under the hood, and they're talking complete bullshit. You know, in the digital age, that's transparent, people find out about it. BlackRock is my favourite example, which is one of the biggest asset managers in the world with $3 trillion under management, who, like think that leader sends out a note every year saying we must be more environmentally aware and responsible. And yet 97% of their investments that they hold, are in non sustainable institutions. We've got to turn that around.
Eric: And what do you think the path is to doing that?
Chris: Well, I mean, JP Morgan is trying to balance between the two. So you can't shut down investments in the fossil fuel industries today. And that, if you did up our world of business, and domestic activity would stop, we rely on all oil and gas, you can't deny that what you can do is say to those companies, you need to be far more refreshed and invest in sustainable technologies. And equally, you can nurture far more green institutions, and green investments. And so JP Morgan, at the moment, according to Bloomberg, has about half of the debt that they're issuing to fossil fuel companies and a half to green finance. That balance over the next decade will probably go to 30/70 30% into fossil fuel 70% into green. And then by 2050 2040. Hopefully, the fossil fuels will be phased out and oppose Han, who's the Executive Chairman of Santander, put it in a really good way, which is Poland runs on coal. So you can't shut down coal today, but you can encourage the movement away from coal, through finance, and that's what we have to do.
Eric: Yeah, and I think increasingly it's not just about the kind of moral responsibility or ethical imperative. It's also about, you know, what consumers are going to be asking for increasingly so and especially in this part of the world and younger generations, like you already mentioned, it is you know, people are voting with their wallet bullets on what they want to see companies committing to and what they want to see brand standing for. And, you know, hopefully the pace of that change picks up and gets there in time for what we actually need to see. And then of course, there's the whole regulatory side of it as well.
Chris: I think that leads from what we've just been talking about, about the cultural mindset change, and digital transformation, because I keep saying digital transformation has nothing to do with technology has to do with the mindset, the culture. And so now my challenge in what I'm doing in the next project, is saying, What do you stand for? If you don't stand for something you fall down? What is your purpose? What is the purpose of finance? What should it be? Is it just to make money for shareholders? Or is it to actually be good for society and the planet and for stakeholders? And that's the debate I've seen in the industry. And how does technology play into into that, and I think it plays very strongly into that, because you can see, and insurance is probably the best example, that if you're providing insurance to farmers, you can now provide technologies through nano chips, that monitors the pollution and the environmental activity in their fields, that reports in real time to not the farm, but also to the insurer about how the crops are developing and how sustainable around whether they will have a good season. And so these things are all coming together in an interesting way in between inshore tech FinTech banks, financial markets, investment institutions, and the general industries they serve.
Eric: So when is the new book coming out?
Chris: It's coming out in the second quarter of this year 2022. It's called Digital for good. If you don't stand for something, you fall down. And instead of writing it myself, I've written quite a lot of it. But I got people from all the countries, or rather all the regions of the world to give their views from ant group in China through to discover group in South Africa. Rabobank in Europe through to a number of companies in South America and the North America's to basically say, What's your view on purpose driven banking, purpose driven finance, from a FinTech view from a banking view, and from a investors view and a market view. So I'm quite excited about it, because it's really going to give in the round perspective, and that's the aim of it, of everything in the world that's going on today. And in fact, one of my favourite interviews in the book was with the co founder of extinction rebellion, which a lot of us may say, Oh, well, they're a bit nuts and a bit strange people. They're all tree huggers, whatever. But actually, they're not the very, as a group, because it's not just Gail, who's the co founder I spoke to, but I know quite a lot of them now. They're just very conscientious people who believe that we don't have enough time to change this world, and we need to move faster. And it's, it's not providing a protest that's violent. It's silent protest. It's active protest, based on doing things like breaking windows of banks, is breaking the window of a bank's headquarter. Something that's terrible, or is actually waking people up to the fact we have to change.
Eric: Well, I'm looking forward to reading it. Chris, I really appreciate you taking the time to chat with me today. We're going to include links to the financer Chris Skinner dot global in the show notes. Is there anything in particular that you'd like to direct people to if they want to find out more about you the book or anything that you're talking about?
Chris: No, I mean, that those couple of sites are the key ones. There's also Captainkake.com, which is my children's book series.
Eric: Yes, I did not find an opportunity to work that in but I thought that was very, very interesting. And I'll have to check it out for my kids.
ChrisL If your kids are between three and seven, that's about the right age.
Eric: Yeah, I got two of them in that age range. So I have to order a copy
Eric: Well, thank you so much for taking the time. Good to see you. And I really appreciate it.
Chris: Thanks for inviting me, Eric.
Eric: Scratch is a production of rival. We are a marketing innovation consultancy that helps businesses develop strategies and capabilities to grow faster. If you want to learn more about us check out we are rivals.com If you want to connect with me, email me at Eric at we are rivals.com or find me on LinkedIn. If you enjoyed today's show, please subscribe, share with anyone you think might enjoy it. And please do leave us a review. Thanks for listening and see you next week.
