I have been working for banks for over 20 Years as a Trader, Client Advisor, Product Manager and Project Manager for process optimization and big IT projects. I still find it a very exciting world. In this blog I write about various banking topics (People, Strategies, Development, IT, Finance 2.0 etc.)
Fear has always been a bad adviser and motivator, so it is in Finance 2.0. To have a too short term view and to focus on the short term profit without having the big picture in mind will probably lead to disappointment and is going to slow down future Finance 2.0 innovations. As in all other big endeavors to have a strong vision is also going to help in Finance 2.0 to overcome obstacles and rough times and not lose ones way. Of course it still remains true, 20% is vision, 80% is implementation. But 20% vision is mandatory!
The shark, the threat
In leadership in general, when people can not be motivated by other measures to do something, threatening is still a way to go. It is not sustainable and not at all the best solution. The same goes for Finance 2.0. Above all in Switzerland the shark or in other words the fear of competitor banks and of fintechs is the main driver for Swiss banks to become active and to go Finance. 2.0. A significant number of them still believe that the shark will disappear again or at least will not bite. Dream on, that shark has tasted blood already. Fear of Finance 2.0 competitors as a motivator is better than nothing but it will not lead to creative and innovative solutions. The banks only react and do not try to find the best solution for themselves. Everyone will agree that in order to flee from a shark it is not the best approach to swim in the same direction as everybody else, neither it is in Finance 2.0.
The rowing, the activity
Certainly to work hard, to be active and to measure ones success is important. But if the success of the rower is evaluated by counting how many fishes he caught in the first place, he will not spot the island because he is focused to much on fishing. In the best case he will become very efficient at fishing. The result is going to be poor though because his equipment is not ideal to catch fishes. In the worst case he is going to give up and never will go rowing again. The equipment would be good though to reach the island and to be rewarded big time when reaching it. It is ok to catch some fishes to survive but the main purpose must be to reach the island as directly as possible. In the Finance 2.0 case that means if the business case is to detailed and too much focused on short term above all quantitative profits, these profits are going to be too small compared to the effort and banks are going to miss the island. In other words they are going to miss the Finance 2.0 jackpot. If banks proceed like that in Finance 2.0 they lose their drive and might be eaten by the shark.
The island, the vision
Let's face it, we do not really know what to expect on the Finance 2.0 island in detail. We are still very far away. Remember Columbus? He had the strong believe that he was going to discover a new better way to reach India. It was hard for him to find sponsors for his trip. Also the result of his trips was not at all the one he expected. At the end it was much more valuable than what he intended to discover. He never gave up is believe, he always had his "island" in mind. There is no other way for Finance 2.0. We need Swiss bank leaders to have a strong vision, to do everything that is necessary to reach the Finance 2.0 island. They should be the one make sure that their employees can spot the island as well, that their employees share their vision and have the strong believe that they will find the jackpot on this very island. All of us do not know how exactly a future digital bank will work and how it will generate profits in detail. Certainly it is going to bring banking to the next level, that is for sure.
The high-tech bubble burst more than a decade ago. Up
till now this experience, above all the losses some faced is holding banks back
from trying out new fresh ideas in Finance 2.0. But history will repeat, because the human
brain has not changed. Time will come when banks “buy” everything with a
Finance 2.0 tag on it. They will follow without using their own brainpower, but
banks should be aware that over 50% of their Finance 2.0 initiatives will fail
or not bring the expected success. Some of the initiatives will change
everything though and be the grand slam. Most probably these will not be their
first initiatives. It will take time. Banks should be prepared for that. They
should therefore not invest too much money in one single Finance 2.0 project
which will take them out of the Finance 2.0 game in case of failure.
I would like to point out, that I am a convinced advocate for the digitization in banking and I clearly think that Swiss Banks are not doing enough and are too slow by far. On the other hand that doesn't mean that an expensive Finance 2.0 project is a better project than a lower priced one. When I say they are too slow that doesn't mean they have to take a huge step and come up with something breathtaking in the very near future. When I follow Finance 2.0 activities of some banks I am bid worried, that those who invest spend too much money and will not be able to show the expected figures. As a result they might give up and cut down their Finance 2.0 budget too much and to soon. Banks should be aware that in Finance 2.0 the approach is trial and error. Therefore they should rather take smaller steps. Not every step already has to bring a measurable benefit. As long they are heading in the right direction it is ok.
Banks should be aware that we still don’t know anything on Finance 2.0 and where it will take us. We only see the peak of the iceberg. As a consequence it doesn’t make sense to blindly follow other (bigger) banks. Also these banks do not know what they are doing. Even for them it is trial and error and if it works for them it will not necessarily work for another bank too or the other way around. Have a look at the bancassurance (Allfinanz) business. This concept has been a big success for VZ Vermögenszentrum, for Credit Suisse not so much.
When I say do not follow blindly I do not mean that banks should invest a lot of time in trying to calculate complex highly sophisticated business cases neither. A very detailed business case will give them a feeling of safety when there is no safety at all. For Finance 2.0 there are too many unknowns which will pulverize a too detailed case. Such a business case might also limit banks view. They might miss some great unexpected benefits generated by their Finance 2.0 initiative because it was not part of their business case and therefore is not measured. Of course a Finance 2.0 project must have a certain potential to be successful. I recommend keeping it simple though. The lower the price the higher the probability of generating a profit and the number of potential users must be big enough. When thinking about the number of potential users banks should not think too much of the past. Only because clients did not use online channels in the past doesn't mean they won’t use new digital solutions in the future.
My dear bank friends be aware: A significant part of your Finance 2.0 activities will be a financial failure short term and a big part of your benefits will be a great gain of knowledge and experience.
This year it was the first time to hold this fair as a combination of the fund fair and fair for structured products. Will it be a success or will it show, that the time of big financial fairs is over? Many people asked themselves this question. It seemed that the organizers put a lot of energy in the preparation and also seemed to have some new fresh ideas.
The fair started to be busy right from the door opening on the day for professionals as on the day for private investors. The visitors where queuing already at 10 o clock. Good for the fair, less good for me who had to stand in line;-)
Right when entering, there was a tweet wall. Finanzmesse 2015 this time really seemed to put a focus on Finance 2.0, great! Even the better it showed, that at least some people where tweeting actively. Above all, the organizers tweeted very actively as well, already weeks before the fair and even more actively during the event. Well done!
There was a panel with the title "Wealth Management 2.0". Not reading the details one could expect something else, something which talks about solutions for a successful future. Actually it was about regulations. The same "old" people talked about the same "old" problems. 2.0 means the future, 1.0 the present, right? Then a more appropriate title would have been "Wealth Management - 2.0" (minus 2.0, meaning the far past). Sorry, I am mean;-) At least Gerard Fischer, CEO of Swisscanto made some good points and made clear, that the extreme regulations we have now help nobody, not the banks and above all not the clients. Filling in a big number of forms, doesn't increase clients confidence and cost of a six digit amount for a new financial start up to receive approval and a licence by FINMA doesn't help the financial sector either. The FINMA Director for asset management pointed out, that this was no problem and that there were hardly any financial start-ups applying. Of course not, with a waiting period of up to one year and very high cost, they would be bankrupt before even starting their business!
Also this year professor Erwin Heri, presented fintool and how he wants to help the financial sector. It is Heri's strong believe that financial literacy and clients who understand the markets better is a key element to future success of the financial sector. I share this believe to 100%! While at the above panel panelist talked about present and future problems, Heri comes up with a solution!
Why financial literacy is so important can be found below in the picture and the shown questionnaire including results. Many visitors participated, so there is hope....
This time there were two panels on Finance 2.0. Both moderated by Reno Borini, publisher of Punkt Magazin. Borini tried his very best to get out some decent information out of the panelist. He was not always successful. The audience also had the chance to ask questions by Twitter, great! It was certainly worse while to participate. That is also what thought the Finanz15 participants. In comparison to past years, both panels were frequented very well, excellent!
Because of the very interesting panels and the even more interesting conversations aside of the panels time was short, or even too short for breakfast and lunch. Thank you very much LEONTEQ for saving my life;-)
Watching the visitors, talking to the exhibitors and participating in the panels it seems the Finanzmesse 2015 was a big success. Well done!
The Swiss fair for structured products and the one for funds turn the page and move to an other chapter. They become one and above all they become digital. In Switzerland there are already a number of events on Finance 2.0 but they are unfortunately rather frequented by tech guys than by business bankers. The Finanzmesse 2015 seems to be the first big event with mainly business guys with a good part of Finance 2.0 and Social Media. Cudos!
In the financial sector, at least in Switzerland, it has become harder and harder to attract a wide audience. To combine the fair for structured products and the one for funds has been a good idea, so is to focus more on the new, the finance 2.0 world. Several steps were taken to become more digital.
The responsibles of Finanz 2015 have increased their activity on Twitter significantly quite some time ago. They are interactive, respond on questions and have increased their activity on twitter in the last weeks before the event even more. This time there is also a hashtag #finanz15 and above all it has been communicated well. For those who can not participate, follow on twitter. I believe the number of people will still be limited but there will be activities. Certainly I will tweet. Take take a look! There will also be a tweet wall at the fair. Therefore who will be absent can not only follow on Twitter but also post their input to the Finzanz 2015 participants.
This time there is also a free and easy to use app available. Great one doesn't need to carry around the paper program anymore and waste time by searching for panels and speeches. No everything is at your fingertips.
Round Tables on Finance 2.0
Last but not at all least, there are going to be also two round tables on Finance 2.0 with very interesting panelists.
Probably the Finance 2.0 activities will not be a huge success yet. It still needs a bit of time till people jump on the train. But it is important to give it a go in order the audience gets aware of it. I hope Finanz 2015 has enough perseverance! ... and I hope there will be Calanda this time!!;-)
Around thousand participant wanted to see what Ossi Gruebel, Prof. Martin Janssen and Daniel Zuberbuehler had to say about risks in the Swsiss Financial Center. They have not been disappointed. A number of strong statements were made by all panelists. It has been both substantial and funny. In my blog post I list my favorite statements from the panelist occasionally accompanied with my own comments.
SFI has made an excellent choice with the panelist. Although it was a small panel it united a huge expertise and experience. Ossi was brilliant as almost always and Daniel Zuberbuehler was better than I expected. Prof. Martin Janssen did a great job as moderator. He involved the former regulator and the former (and current) trader in a optimal way in the discussion.
Martin Janssen, sees 4 key risks for the Swiss Financial Center:
Legislation of Swiss Government
Regulation by FINMA
Swiss National Bank
Behavior of banks
"Risk is life, no risk is death!" Gruebel
"The leverage of banks was by far to high" Gruebel
"Today one believes only no risk is a good risk" Gruebel
"If you do not take risks you will get nowhere. Take risks! Risk is a part of our life" Gruebel
My comment: In the past, sometimes to big risk was taken. Instead of learning and avoiding these risks and only these risks, we try to avoid every single type of risk and we don't see that exactly that is the biggest risk. Looking at the Swiss leaders in banking, Boris Collardi is one of the very few who has courage to go ahead and take risks and has a forward strategy. Sadly enough he is being criticized for his acquisition strategy permanently. That Boris is a risk taker might not surprise, with Ossi he head a great teacher. When it is about new models, new trends for instance Finance 2.0, it is even worse. There to a large extent we are still in the denial phase.
A short History of Banking
"Since computers did not exist, the ones who were most skilled in calculating and ready to take risks were successful "Gruebel
"Use of computer generated more volume, but lower margins" Gruebel
"Technology killed the banking secrecy" Gruebel
My comment: I fully agree but technology/fintech has a huge potential to now save Swiss Banking Industry
Legislation and Regulation
"We already had automatic information exchange in the past in Switzerland" Gruebel
My comment: He was referring to the stolen and sold CD's ;-)
"New laws are always a source of risk, once implemented they will never ever be abolished" Gruebel
"It was said, Swiss Stamp Tax only to be in place for one year" Gruebel
"There is nothing politicians like better than saving and directing a bank" Gruebel
"The politician who understood the Brunetti report, would have a good starting point to work from" Zuberbuehler
"FIDLEG is a failure" Zuberbuehler
My comment: It could be that Zuberbuehler said it in a bid less direct way, but that is the conclusion of his speech.
"We should focus on building national alternatives instead of re-engineering of existing Swiss laws" Zuberbuehler
My comment: It is a kind of scary that even a former regulator has better ideas than Ms. Widmer-Schlumpf
My comment: An important conclusion from these statements is that most politicians do not really understand what is going on and how banking works. I agree on that. It as a complex field and there are only a very few politicians who understand it and take some actions which make sens. As an example, politicians discussions and statements on the gold initiative and most lately on the EUR/CHF minimum rate often were scary. But here comes the but! For this situation bankers have their blame too! The could have gone or above all could go into politics and make a change but widely the do not. When I asked Joe Ackermann, who also believes that more top bankers should be active in politics, what his concrete actions were or will be, I did not get a clear answer.
On printing Money, the Swiss National Bank and Currencies
"You can't create a state fund with printed money and buy other countries assets. The will never ever accept this. Else Simbabwe would do it" Gruebel
My comment: This is idea was brought up in the press. I agree with Gruebel. Of course a country can have a state fund which invests in assets around the world such as Norway for example, but they get their money form oil exports and do not print it.
"The more we adapt to other countries the the weaker the Euro will become" Gruebel
"The Euro Minimum Rate has been a political decisions" Gruebel
My comment: I do share Gruebels opinion. It were the big exporters who influenced the SNB to decide to have a minimum rate and also the decision of not maintaining the minimum rate was influenced by the political environment, among others.
"Quantitative easing will not work in Europe. We are no quantitative easing people" Gruebel
On current Situation and the Future of Swiss Banking
"We killed what we built for the last 40 years and think it is better, in our days the credo is only no risk is a good risk" Gruebel
"We should not forget, we are not the best bankers of the world, we are only among the best bankers of the world" Gruebel
"It also goes in banking, it is worthwhile to be different, with doing the same as all others one does not make money, one will not be successful"Janssen
Last but not least I asked Oswald Gruebel: "Although technology killed the Swiss banking secrecy, could not not now technology / fintech be the one that saves the Swiss Banking industry and what would you do if you would found a new bank from scratch?"
Although I have the biggest respect for Ossi Gruebel and find him a great visionary I did not expect this answer.
"Technology/fintech will kill old structures and old business and create new ones. Most have not understood that yet. Retail banking is better in Africa than in Switzerland because of technology. They did not have anything so they were not held back. Here we have our old systems who still have to be written off. Therefore important actions are not taken." Gruebel
Ossi did not answer in detail on his strategy if he was founding a new bank from scratch. It seemed he really does not feel to found a new bank from scratch at all ... at least not together with the other panelists;-))). It is pretty obvious to me though, if he did, he would opt for digitization!
ZKB ist als @zkb_ch zurück auf Twitter. Der erste Twitterversuch, der im 2013 beendet wurde, war so zurückhaltend, dass ich mich nicht mal daran erinnern kann. Ich werde in ein paar Blogposts über die aktuellen ZKB Twitteraktivitäten schreiben.
Seit letzter Woche ist die Zürcher Kantonalbank zurück auf Twitter. Gemäss ZKB Twitterfeedback diesmal auch mit einer Strategie. Ich bin gespannt wie diese Strategie funktioniert. Im Vergleich zu einer Einzelperson, hat eine Bank in der Grösse einer ZKB zum aktuellen Zeitpunkt, nicht die Möglichkeit ein bisschen reinzuschauen und zu sehen was passiert. Sie sollte sich im Speziellen bereits überlegen, welche Reaktionen zu erwarten sind und wie sie am besten darauf reagieren will. Klar wird der neue Auftritt von der Twittercommunity kritisch begutachtet und der eine oder andere kritische Tweet ist zu erwarten. Mit einer guten Reaktion, kann viel Goodwill gewonnen werden. Gar nicht zu antworten würde ein schlechtes Bild abgeben.
Es scheint, dass sich hier die ZKB vorgenommen hat es diesmal besser zu machen. Auf Komplimente und auf kritische Tweets hat sie innerhalb Tagesfrist reagiert. Auf genau solche Tweets sollte man auch reagieren, falls sie im Fall des kritischen Feedbacks konstruktiv sind.
Aus meiner Sicht werden #Hashtags vielfach zu wenig oder falsch verwendet. Die ZKB scheint es hier besser machen zu wollen. So haben sie den Hashtag #zkb_ch bereits im Twittehintergrundbild aufgeführt. Leider ist der Nutzen dieses Hashtags gering. Wer wissen will was die ZKB tweetet folgt der ZKB direkt und nicht über einen allgemeinen Hashtag. Wer zudem über Twitter nach zkb_ch sucht sieht alle Twitterkommentare, welche @zkb_ch enthalten. Wird eine Firma in einem Tweet erwähnt, verwendet man in der Regel den Twitternamen und nicht einen Hashtag. Sinnvoll wären Hashtags wie #zkbnews, #zkbinvest, #zkbhelp, #zkbdigital etc. und natürlich eventspezifische Hashtags.
Vorschlag Twitteraktivitäten für die ZKB für diese Woche.
Euer Leiter Strategie, spricht am Dienstag 20.1.2015 zu „Strategie Digital Banking der Zürcher Kantonalbank: Erfolgsfaktoren für eine erfolgreiche Transformation“. Nutzt diese Möglichkeit. Tweetet von diesem Anlass, von Eurem Leiter Strategie aber auch von den anderen Vorträgen. Verwendet den Veranstaltungshashtag. Falls es keinen gibt, stellt sicher, dass einer sichtbar kommuniziert wird.
Social Media für Fortgeschrittene
Macht einen Blogbeitrag zum Event vom 20.1.2015 „Strategie Digital Banking der Zürcher Kantonalbank: bzw. lasst Euren Leiter Strategie einen Blogbeitrag machen zum Gesagten. Recycling nenne ich das. Den Aufwand für die Vorbereitung hat er bzw. seine Assistenz sowieso. Nutz diese weitere SoMe Aktivität ohne grossen Zusatzaufwand. Das Top Management der Swisscanto kann weiterhelfen. Die haben bereits Erfahrung.
In diesem Sinne, go for it, zeigt, dass Ihrs könnt!