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What Banks Can Learn From Silent Movies...And The Titanic

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I love metaphors. Which is why Innotribe's next event will be held in the Titanic Belfast museum, recently opened to mark the 100th anniversary of the Titanic tragedy.

When Matteo Rizzi (@matteorizzi) of Innotribe, the curator for this event, suggested this venue, I thought it was genius. I think that the financial industry is going through a dramatic change, fueled by technology and social media. The "too big to fail" ships in the industry are facing dangerous waters ahead.  Like the Titanic was.

So it's time to act! Innotribe@Belfast will be about understanding what is happening, co-creating solutions and planing ahead.

Innotribe events are best illustrated by this cartoon Hugh Macleod (@gapingvoid) drew when he was with us at a 2011 event in Toronto.

A little devilish and provocative,  intriguing, very interactive and sure to ignite ideas in your brain.

So what are these dangerous waters that we need to navigate? I'll set the stage for the event with yet another metaphor, which I used in a recent article I wrote for BankThink of American Banker.

I fell recently under the spell of "The Artist." It's a 2011 film by Michel Hazanivicius, starring Jean Dujardin and Bérénice Bejo. I recommend it highly for its ideas, visual style and the beautiful performances, which collected the majority of Oscars at the last ceremony.

The story is of a silent movie star who is facing the advent of sound in movies, all in the context of the 1929 crisis. The character, George Valentin, does not understand the new technology, has not seen it coming and doesn't understand why the change is happening. His idea of the beauty and artistic value of silent movies is being stormed away.

It struck me that this is where the banking industry is today.

There is an established order, arguably for centuries, about how banks process money and loans as well as the products and services they provide. But the banks are under pressure today to change, due to several factors:

  • The ongoing crisis, keeping the pressure on costs and threatening innovation
  • The advent of the new, connected generation on social media, which is taking international persons to person transactions as a given
  • The advent of complementary currencies (such as airline miles or Facebook credits) and digital currencies (such as Bitcoin and Ven)
  • The advent of easy, inexpensive person-to-person international payment schemes (Paypal and others)
  • The advent of new business models, dubbed banking 2.0 (Movenbank, Simple, Fidorbank), whose aim is simplicity, a fair or ethical or green ethos and customer focus.
  • The advent of telecom operators as payment processors in mobile payments schemes not involving banks.
  • The un-ending explosion of computing power, storage capacity, pattern matching and artificial intelligence technologies which together enable one to make sense of new applications from the gigantic amount of data being generated daily.

Under pressure, exactly like the silent movie world of George Valentin. But George doesn't see it. Perhaps he doesn't want to see it. And so the sound movie "happens to him." In the same way, digital banking may "happen" to established banks.

I don't want to spoil the movie for you, so instead here's a very quick summary. Eventually George, with the help of Peppy Miller (played excellently by Bejo), realizes the predicament he is in. He can't cope with the full change of things, but he adapts and, in the end, rides the wave of change in his own and different way.

This ending fits perfectly with my eternal optimist take.

I do think that if banks realize the massive change that's approaching, they can ride out the wave. They should propose new products and services for the connected generation to enable them to manage their digital assets (and not only money – think of everything from sensitive information like addresses and Social Security numbers to important documents like wills stored digitally) and help them be more accessible (through application programming interfaces), in order to establish themselves as core business intelligence processors. If you want to know more, here is a presentation, which I use often to illustrate some of the opportunities.

Do you think I'm exaggerating by comparing the rate of change of today to the shift from silent to sound movies in the 1920s? I'm curious to know. Leave a comment. Or better yet, join us at Innotribe@Belfast.


This work by Kosta Peric is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.