Hello Suzanne. You kindly took on the role of Chairperson for Big Tech North America in May 2021. Can you tell us a little about yourself and why this conference was of interest to you?
I worked in corporate and investment banking for more than 15 years covering a range of clients in the financial institutions and fintech verticals. I recently transitioned to a large technology company working to build relationships with early-stage companies and potentially invest in great companies that align with our business objectives. I also spend some of my free time advising start-ups on a range of opportunities including M&A, fundraising, strategy, partnerships, and board selection.
The conference was interesting to me because I want to demystify the technical jargon and inspire leaders to be prepared to compete in a world of accelerating technological change and changing consumer preferences.
This event had many topics up for discussion, but knowing your wealth of experience: what are some of the more interesting developments within the financial sector right now?
I am really interested to better understand the true impact that the past year during the covid pandemic will have on transformation initiatives at banking organizations around the world. Anecdotal evidence has shown that that a by-product of the pandemic is an acceleration of digitization initiatives. I am curious to see if this is in fact true.
The seemingly overnight interest in digital assets/crypto currencies by traditional financial institutions is interesting. To what extent is the phenomenon sustainable or is it a passing fad?
Despite not having a crystal ball, what would you say can be a disruptive force within the financial sector in the next 2 years? Are there any signs of this disruption happening now?
An area of financial services that I follow closely is the payments sector. I think this area of financial services is ripe for disruption from the traditional players. The existing payments infrastructure has been underinvested in for many years leaving the products available to most customers that are slow, unreliable, and expensive. The goal in the payment’s ecosystem is the ability send/receive real time payments globally and across currencies… and for a reasonable price. We are not there yet but with some great innovators working on this problem, I believe in the next few years we will have some great options for consumers to choose from worldwide.
With that in mind, what actions can companies take now to mitigate this disruption. Are there any companies that you believe are already well-prepared?
Companies can take a hard look at their legacy architecture and make the changes needed now to be able to compete with new entrants who can move faster, and gain market share quickly.
Recruiting and retaining high quality talent to compete with non-banking institutions needs to be high priority. Due to more capital that is now available to early-stage companies (from the venture capital and private equity industries), they are now able to attract high-quality talent from traditional institutions, give them meaningful professional growth opportunities and pay them more competitively than in the past. I have seen many seasoned professionals from banking leave the industry to go to start-ups and find meaningful professional fulfilment and make the same (if not more) than they were making in their previous roles in banking.
FinTech companies that appeared less than 10 years ago are now formidable rivals for established organizations. Is merit in established companies rapidly developing new offerings or is it more prudent to collaborate with FinTechs rather than oppose them?
I think it really depends on the product. What I see more likely to happen is for traditional banks to relinquish lower-margin businesses and customers to fintechs that can serve this segment better, cheaper, and faster leaving the higher margin businesses and large corporates/HNW Individuals for the banks. From what I have seen, many banks are learning where they should compete with new entrants and where they should be ok to let it go. Due to a long list of reasons including technology, regulatory and operations, banks can no longer be the supermarket for every customer everywhere.
Collaborations between banks and fintechs are likely to become more prevalent in the coming years as more fintechs are gaining the scale necessary to serve the banks with better/relevant capabilities, staffing and products. Non-revenue generating functions within banks such as KYC, cybersecurity, and regulatory-required operations will likely get the first investments as the necessity to invest in these areas is long overdue.
Customer retention remains key for many and while brand loyalty isn’t over, it can be said to be struggling. What successes have you seen in establishing new methods of client retention?
As mentioned, I think the traditional banks are more inclined to retain wealthier and older customers in the near-term while new entrants are going to continue to gain significant market share of less affluent and younger customers. Customers today are much savvier and more willing to change banks that provide the products and services that they require to keep their business. My best advice to any bank today is to listen to your customers and do your best to adapt to their preferences rather than the other way around.
On a similar line, what about employee retention? A lack of qualified talent and a new workforce that shuns long-term employment are problems for this sector. What change do you think is necessary, even if it doesn’t come easy?
I think the talent pool today is incredibly qualified, but the difference now is that there is more competition for talent especially at the junior levels from private equity, tech companies and start-ups. Today’s young professionals are the most diverse ever and they come from all walks of life and personal experiences. Banks need to be willing to extend their imaginations and invest in the leaders of the future. The next great banking leaders are likely to come from non-traditional places.
From my experience, young professionals are willing to commit to employers who meet their professional and personal goals. They want meaningful work with a defined purpose, the right technological resources to complete their work and the ability to learn. Employers that meet those goals have seen great success retaining young talent.
As well as your role as a FinTech Thought Leader, you are an experienced start-up advisor and Angel Investor. Without giving too much away, what start-ups have you seen that could revolutionize the financial sector in the coming years?
I am keenly interested in companies that are trying to solve real problems for potential clients and have a defined path to get there. Very often I see companies that are trying to sell a product that either does not solve a real problem and/or the team does not have skills, resources, and in-depth understanding to fix it. Entrepreneurs with a clear vision and the right team to support them is interesting for me.
And finally, what are you most looking forward to seeing at the Big Tech North America event?
I am really interested to hear from the great diversity of speakers, panellists, and guests about the full range of topics in innovation in financial services. The financial services industry has tremendous capabilities to do great things and I am optimistic that with the right investments in talent and technology the industry can and will thrive for many years to come.