Fear of missing out vs fear of failure: how to resolve the conflict
The fear of missing out (FOMO) forever clashes with the fear of failure (FOF) when it comes to innovating in banks. Lee Cameron, CEO of Monitise, explores the FOMO versus FOF conflict and how to resolve it.
FOMO is commonly cited as being characteristic of the Instagram-driven millennial generation, but how does this relate to this generation of banks?
There is a lot of discussion about how the UK’s world-leading financial service businesses need to innovate in the face of changing consumer behavior and the growing popularity of fintech businesses. Yet when it comes to embracing change, banks are slow to innovate and adapt.
So, just what is standing in the way of change, and how can we leverage FOMO, allow for the inherent corporate FOF and still create an atmosphere that encourages innovation?
The balancing act of FOMO and FOF: how to get it right
The market forces driving innovation and fuelling FOMO
Bank FOMO is being fanned by a number of market forces.
Technology offers new ways of working and enables endless ways to enhance user experiences. With this becoming the norm, customers expect the frictionless immediacy that is provided when using Uber or Whatsapp, from other services in their life.
A smart optimisation of data will help banks to personalise their services for users and catch up with new market entrants who are not bound by legacy and possess more agility.
New regulation (PSD II) is also in support of innovation by allowing third parties access to customer data stored by banks and trigger payments, thus promoting change in a responsible way. This leaves banks little choice but to up their innovation strategy to retain market share.
The potential to miss the mark due to FOF
Our experience over the last decade tells us that banks are in a continuous state of transformation and there is significant investment across the board into various innovations.
The bottom line is that these initiatives need to be set up to do this for real with real customers.
Typically banks tend to have the innovation impulse but not the innovation commitment.
Of course, putting innovation in front of customers is a difficult breakthrough in such a highly regulated market and in an entire industry (not just banks) that is not used to embracing failure, testing and ultimately learning from it.
Collaboration not competition
This breakthrough could come about sooner with the collaboration of established financial institutions and the more snappily branded “fintechs”.
To overcome the FOF hurdle, we need a new model where the brightest minds from within financial services working at the biggest banks, collaborate with key fintech players. A collaboration like this could redefine the industry, disrupt the banks from within and bring together design-led thinking with the power of an ecosystem and the API economy.
Bringing the two sides together would create groundbreaking teams of those who are masters of innovation and those who understand regulatory matters and other intricate workings of the industry…
This is an excerpt. The full article is available in the May 2016 edition of Banking Technology. Click here to read the magazine online.
