Breaking Banks - Brett King and Anthony Jenkins

All working for incumbents in financial services (and for all other interested in fintech) should listen to the breaking banks talk between Brett King and Anthony Jenkins. Anthony is the former CE of Barclays and leads now 10x Future Technologies and build a financial service platform. Below follow some snippets from the talk.


All banks do is intermediate (7:00).

Most important technologies (7:50)

• Distributed Ledgers
• Machine Learning and Artificial Intelligence

Incumbent Problems (12:30)

• very difficult for incumbents to change
• its the culture (culture is the long term memory of an organisation)
• Legacy technology burden
• Regulatory changes
• Excellent people but embedded in the culture

What does 10x Future Technologies do (14:30)

• build a 10 times better system
• big focus on information

Don't sell products or services, sell outcome and experience

Digitization is not about technology- it's about shifting business models towards outcome and experience. And when the shift is clear, then its time to choose the best technologies to make it all happen. The technologies are the enable to make things happen. There the second aspect kicks in - things are evolving fast so it is key to be agile to be able to move fast. There is the third challenge - the structure and organisation must enable this. Network structures with self contained teams focusing on creating value. The classical hierarchical multi matrix structures are at the end - the company structure must reflect the value orientation and the need for speed. The new structures should be built in a way to foster engagement and let the talents have skin in the game. This is the fourth challenge - the dumb spreadsheet based outsourcing does no longer work. It is always better just to have small teams of talents which have the best possible tools rather than huge teams of cheap resources which require continuous management and monitoring, Experience shows that complexity and coordination effort doubles in a team with any size increase of 25%..
There is one nice side effect for all who master these challenges. The culture will change - working with a clear purpose towards a shared objective as a team in a lean organisation will result in a much better culture. Think about culture as the memory of the organisation - it takes some time but there will finally an outcome oriented culture.

The Amazon Way: 14 Leadership Principles Behind the World's Most Disruptive Company

Today I listened to "The Amazon Way" during a longer hike. The book is indeed interesting - but partially a little bit repetitive.

There is one cluster of topics which captured my attention - the "customer obsession". It is all about the customer. Start with the customer and then work backward (outside in). It's about simplicity to allow the client to reach the desired outcome at the speed which is optimal for him. It is about flow and with processes and systems enabling it. The need to aim for full self service in such a way that customer service is not required is a natural consequence. And this is the base for scalability. And this allows not just to think big - it allows to reach the high ambitions.

This is in sharp contrast to the behaviours of incumbent companies in many sectors. They often think inside-out and build the processes and systems around the internal structures. Client service suffers, processes are without the flow and breaks and human interactions are part of the solution. Such approaches do neither scale nor do they deliver the client experience which is today expected. It's about the ability to achieve goals and reach outcomes everywhere and at any time.





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Alexa - first steps ..

Now as Alexa is here, it is time to see what can be done with it. There are many tutorials - I have picked  Developing Alexa Skills, a series of six videos.

The first step is to understand what an Alexa skill is. There is the skill service, which handles events triggered when interaction with the Alexa device.The skill interface links spoken words (sample utterances) to events.

New skills make Alexa smarter (and increase the value of the platform for Amazon). Skills get an anonymized token which they can use to identify users over time. So far the platform seems not to allow the access of actual user data.

A key feature of voice first services is the availability of context - context comes from the passed interactions but also from the environment. Typically a person only speaks out those things which are not obvious to the listener. 

Another interesting aspect is that the answers need to be short and snappy. While there is a tendency in ui's to render a lot of cool views and graphics, this does not work with voice. Also lists, which work well on visual ui's are not really a great choice for voice ui's.

An interesting question is how voice authentication will be solved. Currently device is there an reacts to all people talking to it. There is the option to switch profiles ... but in order to move towards a personal assistant it will be required to have a solid but hopefully transparent authentication system.

Voice first - Alexa and Dot arrive

Alexa arrived Wednesday and started to engage with the family after a short acclimatisation where she was introduced to the local WiFi (this was a little bit harder than it could be due to the fact that Alexa is not yet officially supported in Switzerland). Dot, her smaller brother arrived together with her and found a friend in a Logitech Boombox.

First impressions:

• Voice recognition is excellent - both in English as well as in German.
• The interaction is intuitive, very intuitive
• Alexa is immediatly accepted 
• The app which allows customisation and also the skills do not yet unleash the full potential

The potential is huge - no doubt. Yes, there are things which work better on a conventional device today. We are by now used to browse through large lists and alike. With voice there is the need to move a few steps further - understand the meaning of a question in the context and provide a tailored and short but meaning full answers.

Alexa today can be compared with the Netscape navigator - an early browser which was key for the evolution of browser technology and the web.

Can the tail wag the dog?

There is one big constant today - it's change. Fast change is in direct conflict with human nature - we are all used to develop habits based on experiences we make. If things change slowly, then this works well. If things change fast, then this is much more difficult. If huge changes or paradigm shifts happen, then we are truly challenged - we must unlearn and relearn and this takes time.

Big organizations share this pattern - they also have issues to adapt fast to changes in the environment. Often companies are still in party mood when the change has already progressed substantially. 

I think there are two reasons for this: 

• Many companies drive forward by using the back mirror - they look back and imply that things which went well will go well again. It takes some time until the changes are also visible when looking backwards - typically then when things are already bad.
• Many companies tend to compare their situation with their peers - which are often in the same situation still wanting to impress each other.

The challenging situation is often not understood by the head - but there may be an uneasy feeling. The dog stops wagging its tail .... making it clear that something needs attention. 

In some way, the tail starts to wag the dog. It takes time and this is increasingly problematic in a time of fast change.

Where does the uneasy feeling come from? Typically from those how have special expertise and experience. Typically from those who are exposed to continuous change. 

The challenge of increasingly fast change ...

We do only understand things relative to things we understand already. Remember school - there was a base established and then new material was relying on this base knowledge. Those who did not understand the base had a hard time. The overall human learning process is rather slow.

• We live in a time where change happens fast - increasingly fast.
• Currently many things evolve in parallel - many of them exponentially.
• These things can be combined resulting in addition in a combinatorial explosion of possibilities.
• And there are also paradigm shifts - things which change near the base of our knowledge and require unlearning and new learning

All in all, we need to adapt faster and faster to changes. We cannot really lay back as there will be somebody out there who will provoke the next cascade of fast changes.

This is also true for companies. They need to start to work much more like living organisms rather than static hierarchical structures. Each cell must deliver value, increase its efficiency and help the organization to proceed and try out alternatives. Some of the will fail and a few will be successful and become the base for the future evolution.

The effect seen at school that those who do not master the base knowledge have difficulties to advance is also true for companies. It is also hard to find good combinations of things unless there is a good level of understanding established for each of them.

In other words - the ability to unlearn and learn again will be the decisive factor for success.