Jurassic Bank – Why banks will have to go the way of the dinosaurs

David M. Brear Group CEO

19th June 2016 • 5min read

65 million years ago, gigantic monster roamed the same places where today Starbucks and Costa Coffees are. Having dragged themselves out of the primordial goo and evolved themselves to the top of the food chain, the Dinosaurs were oversized in their appetites, attitudes and on top of the world.

What can the monsters of today learn from the monsters of the past to avoid the extinction events that wiped out the dinosaurs? Let us explore, with Jurassic Park puns and quotes aplenty… hold on to your butts.

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I posted the below picture a few weeks ago on Twitter, annoyed that half my @FinTechMafia buddies were in Las Vegas for various banking conferences and the other were touching down in Singapore for similar purposes, while I was heading to the Dinosaur Park with my kids. One of them (I think it was David Birch @dgwbirch) pointed out that I wasn’t missing anything and that all of those events would equally consist of a bunch of Dinosaurs and a lot of slides! While I was walking around the Dinosaur Park, I got to thinking that maybe that comment wasn’t too far off the mark and felt there was a lot of similarity in the tales of the both the Banks and Dinosaurs. 65 million years ago, gigantic monster roamed the same places where today Starbucks and Costa Coffees are. Having dragged themselves out of the primordial goo and evolved themselves to the top of the food chain, the Dinosaurs were oversized in their appetites, attitudes and on top of the world. Our current banking system has evolved over the last 300+ years to be dominated by similarly gigantic monsters with similar appetites. What can the monsters of today learn from the monsters of the past to avoid the extinction events that wiped out the dinosaurs? Let us explore, with Jurassic Park puns and quotes aplenty… hold on to your butts.

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Inspiring awe - Trust

People used to look up to banks and bank managers in the way that they did pilots. The bank manager were the pinnacle of respect from the public and the community they served; this is clearly no longer the case. Trust in banks in the UK is lower than anywhere else in the world right now. The low level of trust in banks is strange because trust is the very basis of banking. I put my money in a bank rather than under my mattress because I trust them to take good care of it. Banks have historically been pillars of the community. In fact, if you look at the 500 year history of modern banking, a period of low trust is quite unusual.

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Both struggle to change their behaviors

The dinosaurs struggled to react to their changing environments leading to their fall in a similar way to what banking is experiencing today. Banks are in the midst of shifting from a sales-focused organization to customer centered one with some transitional pain still to come from this. Banks sales staff still want to hunt customers. After all you can’t just suppress 300 years of gut instinct over night. Can you?

Too big to sustain!

No one is totally sure what dinosaur metabolism looked like, but the best guesses for how much food T-Rex ate seem to cluster around 40,000 calories per day. That works out that a T-rex only needs about 80 Big Macs per day to survive meaning one McDonald’s could support over a dozen tyrannosaurs each. That’s a big appetite! Banks have become equally “calorific” with most of them spending at least £100m-£150m on their digital transformation programme each year. They have become bloated both in terms of processes and numbers of staff and because of this, have become slow and lumbering. This has to change.[/vc_column_text][/vc_column][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_column_text]

Too big to fail?

This term has been thrown around a lot in the last 5 or so years with banks being put on a pedestal unlike any other industry. The too big to fail approach didn’t work well for dinosaurs and should another financial crisis occur, I do not believe the governments of the world would treat them with such respect. While both the banks have become truly huge in size, the new breed of banks are more akin to the raptors we have seen in the movies. Banks like Mondo (@getmondo) in the UK are setting themselves up to be fast, customer focused and working in a team with other FinTech suppliers to deliver (via their APIs) an aggregated range of banking services.

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We know how the Dinosaurs died right?

We all know the stories right?, some massive shift in the environment and a meteor and bang; Dinosaurs are gone? Well that’s not really the whole story. Dinosaurs are around today, just not the ones we see in the movies. Crocodiles, sharks and lots of other animals have been around since the time of the Dinosaurs. They adjusted to the changing environments, food supplies and evolved. Banks need to do the same. They have all of the resources in place to survive the meteor heading to earth if they choose to do so. Banks have all the investment (more in many cases!) they need, nearly all the customers and enough resources needed to make the changes required to defend, evolve and become a new type of bank. So banks do need to go the way of the Dinosaurs whether they like it or not; They need to evolve. Only they can decide whether they want to be a T Rex or a Crocodile. What is your bank? Crocodile or T Rex?[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column column_width_percent="100" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/1"][vc_single_image media="55911" media_width_percent="100"][/vc_column][/vc_row]