Sunday, February 22, 2015

The Motivation to go Finance 2.0

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.

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