Big Companies and Disrupting Technologies

Most incumbent companies plan or try to embrace new technologies and act as start-ups.

In the banking industry, top management considers the concept of a bank as a fintech company. For example, the HSBC motto is “Big Bank funding. Fintech thinking.” The motto reflects a step in that direction, but only half of a step. Banks already offer loans to start-ups and fintech companies, so additional moves might only increase risk appetite in the venture business niche.

To complete the step, the parts of the motto should be swapped—fintech thinking first and big bank funding for it, or the big bank funding will constraint ideas or thinking to only those acceptable for that funding.

Fintech thinking implies one more fundamental shift. That thinking must be directed INSIDE of the company: discover innovations, new products or even new business niches for the company or the bank. This change must be supported by an extended business strategy, operation model, and technology platform to help with those innovations. The extension must include real enterprise agility with appropriate innovation, risk, project and change management, budgeting, governance, and the popular agile-based software development.

All managers agree that change towards new technologies and enterprise agility is mandatory. Still, not everybody has a clear and grounded answer as to why that is required, what transformation is needed, and how to get there.