How to Make Banking Better in 2022

Jim Marous:
Hello, and welcome to Banking Transformed. I'm your host, Jim Marous, owner and CEO of the Digital Bank Report and co-publisher of the Financial Brand. The banking industry has never been under more pressure to change, the challenge is not whether digital transformation will occur, but whether the right priorities will be in place and whether the speed of change will be fast enough. When the organizations will combine new technology with legacy values and experiences, they will leverage partnerships, create innovations at the speed and scale of digital, and will embrace a new challenger mindset. We are so fortunate to have Leda Glyptis, chief client officer at 10x Banking on today's show. She will discuss the areas of retail banking that are most ripe for disruption and how the winners will differentiate themselves. So, welcome to the show Leda.

Jim Marous:
It's been too long since we last talked, but it's not like we haven't kept in touch, I love reading your Leda Writes posts on Thursdays and we often exchange commentary, like we did today, based on your great observation about the bank industry that we see in front of this every day, but you share it in such a way that everybody's going "Oh man, been there, done that." It's interesting how our paths are somewhat similar, in that we both are recovering bankers, I love that comment you say, "And we're both long-term residents of the banking ecosystem.", for me, it's my entire career, I've been in banking since I left university, and I've been in one side or the other of the desk or writing about it my entire career. But before we start, can you share a little bit with our audience as to who Leda is and what you're doing right now?

Lega Glyptis:
Absolutely. And first of all, thank you so much for having me, and thank you for your kind words, it's always nice to hear praise, it's particularly nice when it comes from some people, so I definitely cherish the fact that you read and engage and comment. I am an accidental banker, I'd like to think, so I am similar to you, ended up in banking pretty soon after university, but entirely accidentally, I'm a political scientist by background and I, sort of, fell into banking and realized I was good at it, which was quite depressing for me, because I was quite a fire brand and this was not what I thought I'd be good at. But also I got extremely emotionally invested in a journey that I was lucky enough and old enough, depending on how you look at it, to catch from the very beginning, because the last 15, 20 years have been absolutely spectacular for our industry in terms of transformation of systems, culture, technology, and in fact, it has been technology that's been, sort of, setting the pace and instigating. But as you know, and speak to, and write very often yourself, it's the humans that get in the way.

Lega Glyptis:
So, I spent most of my career on the more traditional side of banking, I've worked for some giant institutions, including BNY Mellon. I started in IT and operations, which is a great school, if you want to understand how everything works, and then moved to client facing technology and innovation roles. I spent some time in the Middle East as the chief innovation officer of Qatar National Bank, which was an amazing experience. And then came back to the UK and moved on the other side and I've been working in the cloud native core banking system world. So, essentially building software for banks, I'm with 10x banking at the moment, doing exactly that, so we're collaborating with banks like Chase UK and Westpac in Australia, building systems that are turtles all the way down, actually, truly digital capabilities that can help scale alongside a bank's ambitions.

Lega Glyptis:
But as you say, I've been on both sides of the divide and a lot of the journey is quite frustrating, and I won't lie to you, I started writing my column that is now in its sixth year because it was like therapy, it was a good place to just leave the frustration on the page and not carry it into work the next day. And it brought me to an incredible community, including you, as you say, "Like-minded people who read it and go, "Yep"", and you're thinking "I'm neither crazy nor alone.", we all see it this way, and by giving it a name and describing what we see, and the insanity of some of it actually makes it a little bit easier to address. So it's been a hell of a journey.

Jim Marous:
Yeah. It's interesting, I've referred to my early banking days as a teller, as a management trainee, as a loan officer and all that, almost daily in some way remembering what that was like, remembering that at the end of the day as a teller, it didn't matter how good a person you were and how good you were with customers, if you didn't balance, your job was at risk. They talked about selling, but if you didn't sell you weren't in trouble as much as you were if you didn't balance the books every night. And what's interesting is, today's article, for instance, you talk about a legacy banker, that all of a sudden your bank doesn't recognize that you exist anymore, at least from one of your accounts, and that your legacy banker helps you dissect that as much as he can on your behalf. Now, it's not like your legacy bank isn't working really hard at digital transformation, it isn't that things are always changing, in fact, sometimes that creates its own problem. Why is it that as bank continue to try to advance, they get it wrong or they may make missteps so often?

Lega Glyptis:
It's such a good question and such a big question, and I could give any of a hundred answers and they would be partially true. I think there are three factors that are independently true and all get in the way of this journey. And one is that, legacy banks spent a very long part of this transformation period of the last 15 years believing incorrectly that they're in charge of what happens and when it happens. And I know that you were one of the loan voices advising that... That is not the case back then, but the reality is the legacy banks of all sizes had gotten accustomed to being in command, and they were used to using technology, from ATMs to algo trading, using technology to forward your business was something banks were extremely comfortable with. What they were not used to was rapid change in the economy that would dictate what they needed to do and at what pace. And I think a lot of time was squandered believing that they were more in control of the process than the actually were, so everyone is on the back foot, I think that's one thing.

Lega Glyptis:
The second thing is that there is so much, the estate is so big and so complex that once transformation starts, and as you rightly point out, a lot of money, human capital, creativity is being spent on this transformation, but where do you begin? You begin where it's most visible. I wrote a piece a couple of years ago called I Want My Bling Where I Can See It, you have the spend where it's most visible, either by consumers or by investors or by the street. Then you go where you have the highest things at stake, where you have instability, poor performance, high yield, which means that all of the things that are tricky are being left lagging even more behind, but the things that are tricky could be whole segments like the elderly, who are historically unprofitable for banks, and they're being left behind like crazy. Bank accounts in exotic currencies, as we like to call them. So entire populations that are just stuck at the back of the queue at no fault of their own, exactly because the squandering of time at the beginning and the hugeness of the estate means that by the time we get to whatever system and whatever priority, blah, blah, blah, another 10 years have gone eye.

Lega Glyptis:
And then the third piece is we have terrible habits as an industry. A lot of really bad habits and a lot of what I tend to write about, in fact, I'm trying to compile all of my Leda Writes ideas in a book at the moment and it's both-

Jim Marous:
Oh, that would be so cool. Yeah, exactly.

Lega Glyptis:
I'll be back here when that's done. But I am trying to pull all the ideas together, and not pull the pieces but distill it down to, if we are the thing that gets in the way, what is it about the way we operate? I think the biggest... And I'd love your thoughts on this, I think the biggest challenge banking has that really helps answer the question you asked me is that we have this cult of busyness, and everyone's day is chopped up in half hour increments that add up to a 14 hour day, it's not designed for creativity, it's designed for complex thinking, it's not designed for tackling big questions and it really decimates both your attention span and your patience. So, add those together and it's awful.

Jim Marous:
Yeah. We're so used to doing things the way we've always done them, it's human nature, it's not something that is just a banker's mentality. The reality is though, as we try to catch up, what many banks are trying to do is do what they did before faster or add things to the mix, and the reality is you really have to rethink it from the core, that's what your company does. When you look at cloud computing, if a organization simply took everything they have today and put it on the cloud as it is today, it does not make the institution better. It simply possibly makes it faster, it possibly does other things, but it's probably going to mess things up.

Jim Marous:
And I think we're also hindered by legacy banking leadership. And it's not always that bad, but I look at my bank, I look at when I was in the banking world, the people in leadership were the guys that play... The white guys that played golf together on a Monday night, went through the whole system together, and the good old boy network. And I don't mean that harshly, but the reality is it's still the case today. The challenge is they've done well. Success does not create change, and so when nothing seems broken, it's hard to see how broken things are. And, I think the fintech world, I was talking to one of your old cohorts in a conversation the other day and I think the one thing that's really stimulated a lot of activity is the fintech universe, because it's really brought light to the fact that "Oh, by the way, there's real competition out there and they're doing things differently.", so you try to get on board. The challenge is, most of the fintechs don't have legacy leadership that has all these thoughts about how things were done, the 15-step loan process, whatever it may be. And so you don't have that.

Jim Marous:
So, you know what's interesting is one thing that we're seeing now more than ever before, and you've referenced it in your article even today, is that organizations don't realize that just because you have the accounts, doesn't mean you're not losing the relationships, that we're building our own open banking environment within our own relationships, whereby what may have been a checking savings account, one bank, and maybe another checking savings account another, now has five or six different relationships that are inside and outside the traditional banking industry. Do you think this is a major problem that financial institutions don't really understand, that there's a bigger pain than what they're seeing?

Lega Glyptis:
100%, you're right on the money. And if we take it back a few years, the word was disintermediation, right? Banks had finally come to realize that what was happening in the fintech world wasn't going to take them on head on like for like, but was going to bite away at their value chain, and the fear was that it would be at the fatty parts, it would be... They won't take away the deposits, but they'll take away your effects transactions. They won't take away the, sort of, more heavy, low value activity, but they would do their trading elsewhere, they would do... And that absolutely happened. But when banks started going, "Oh, rebundling, we can become a platform." I'm beginning to understand that we came onto the next frontier, which was, "You really don't understand platform economics, Mr. Banker."

Lega Glyptis:
And what the combination of open finance and API standardization and messaging standards and data standards, what all of those maturing over the last 10 years has given us, is the ability to do exactly what you described, to have a set of layered services in a banking as a service environment, or an embedded finance setup, that allows the consumer to be protected, to be completely in control of what they do, and the bank is pushed further and further away from the consumer, both in terms of owning their relationship, remember when banks were all about who owns customer, and they would fight internally with each other's department about who owns the customer. Meanwhile, now, which bank is underpinning your service on top of a banking as a service capability? You might not even know.

Lega Glyptis:
There are a lot of challengers that started on prepaid cards that were essentially on rails owned by legacy banks, none of their consumers know that. And what I find very interesting is that the space between being able to do something like this and not being able to do something like this, is all about leadership, not about technology. So, I work with Westpac, right? I have only very, very close examples from one case of a bank that is legacy, that is historic, that's one of the oldest banks in Australia, and one of the biggest, and they said, "Banking is a service.", I get it, and I want to be a part of it, and I want to be the platform, but I understand that the economics of it are similar, of course, but different. So, if it coexists next to the traditional bank, as it should, it will be a completely different ball game, because you will surface competitors. You will enable competitors, and the way you'll monetize the relationship will be completely different.

Lega Glyptis:
Now, there are two fundamental challenges in taking that decision. One, you need to understand what you're talking about, you need to understand how platform economics work, how this new world is completely different to how you used to make money over there. So you need to understand that, and that is complicated. And the second is you need to have the courage to drive a brand new set of capabilities, on incomplete information, because success looks inevitable from the far shore, but you don't know if you're going to succeed and you need to have that courage, which is what leadership should be about. But let's face it, legacy banking, you pointed it out very aptly earlier, if you do what your predecessors always did, you would safely get the corner office and get very well remunerated, why would you disrupt that? Just to extend someone else's future? So, you need genuine leadership to go, "I understand that this is complicated and different, but I get it, and I am going to venture forth like a leader should."

Jim Marous:
It's interesting. When you look at the banking ecosystem today, what stands out to you as maybe the most important trend that is changing the industry? Is it platformification? Is it the ability to look at it from a broader perspective?

Lega Glyptis:
I think it is platformification, 100%. And I think it's platformification for three real, fundamental reasons. One is, it allows consumer choice and consumer protection without putting them at a tension. Because the earlier years of fintech, you started having proliferation of choice as a consumer, but my mother would be a little bit nervous about banking with a challenger. The platformification, the expansion, the growing up of fintechs, but also the layering of banking as a service capabilities and the way that the regulator is maturing means that as a consumer, you have a lot of choice, but also increased protection, it doesn't feel like a risky strategy even for more conservative consumers. So, this is super important, it's putting the consumer right at the heart of this and it gives them the power that should be theirs for the taking.

Jim Marous:
Well, it's interesting, it does create a new revenue model potential too. We've seen it already, you don't have to generate the revenue from your banking services, that's why I was always concerned about Amazon getting into banking, it's, I'm going, "They can actually pay me $100 a year to have banking services with them and pick it up through the other businesses that they have."

Lega Glyptis:
Oh, 100%. In exactly what you're saying, there's the other piece that I suspect a lot of banks haven't woken up to, which is, we already have too many banks. And the world doesn't need that many platforms, in fact, the value of a platform is on the size of its ecosystem and the richness of its ecosystem. So, if you're playing on top of a platform, you can be on every platform, but if you're trying to be the platform, which is where most banks are trying to position themselves because they can't really think of playing on top of someone else's infrastructure, right? How many do you need?

Jim Marous:
Right, exactly.

Lega Glyptis:
Really. It's not going to be a monopoly, but it's definitely going to be an oligopoly.

Jim Marous:
Yeah. And it's interesting, because among all this information, you have technology, you have data, you have an analytics, you're really talking also about the democratization and expansion and power of data and insights, where it's not going to simply be in these great reports, you'll really be developing brand new opportunities, product development opportunities, innovation opportunities, customer experience opportunities, built on this data and this insight, which banking, except for in risk and fraud, has really not done very well with in the past.

Lega Glyptis:
No, you're absolutely right. But neither side of the divide has done really well. And that's what I find fascinating, that at the beginning, there was the attitude of the big boys saying that risk modeling not applying, boundaries being fungible, was why you should stay away from the challengers. And the reality is that some of the challengers have not covered themselves in glory with some of their AML work, et cetera, et cetera. But as the world is moving to the cloud, as you rightly pointed out, and it's becoming more real time, the complexity of what we need to do has actually exposed a lot of vulnerabilities in the legacy systems. So, actually, the stumbles have been as frequent on this side of the divide, if not more frequent. So, I don't think it is about big or small anymore, legacy definitely slows you down, but if you're paying attention it could teach you a lot of things. It's about what problem are you trying to solve. The fact that you were here at a certain time and with a given size doesn't actually guarantee your a right to continue to exist in the same space and with the same size, so what are you here for?

Jim Marous:
And how quickly can you solve for it? At the very beginning of the pandemic in January of 2020, I was lucky enough to be able to visit Tencent. And going into their tech room and seeing four parallel clouds running at the same time where they're testing things, they have an ideation to implementation about 14 days, they have the ability to test things in an immediate environment where there's parallel clouds where you can test it with a real marketplace to see how it works, and the willingness of the management to say, "If we're wrong, we can back off." So, it really gets to the speed and incrementalization of ideas. So, as you said, if you find something wrong, can you fix it quickly and easily as opposed to putting into a planning process that would take a year to get done? I talk to people now about the fact that speed of implementation and speed of innovation is so vastly more important now than ever is going to be and ever will be again, because you have a situation where the consumer and the financial institution itself, you fall further and further behind if you overthink a process, perfection really works against innovation.

Lega Glyptis:
That is absolutely right. But I think there was a magic word in what you just said, if I'm wrong, I need to be operating from a starting point where I anticipate that it is possible for me to be wrong, and I operate in an environment where if I'm wrong, someone will tell me. But the hierarchical nature of most traditional banks, less so in fintech, so although quite a few fintechs have carried some of those bad habits, but the hierarchical nature of our organizations means that people come from a place of, "If I'm your boss, I'm infallible," and the culture of surfacing these challenges and admitting you're wrong in a timely manner is not there, and you see a lot of people who spend a lot of time defending a mistake because they spend a lot of time making it. And what you pointed out there is the absolute crux of it, going into a situation being prepared to be wrong, learn from it and pivot, that's the survival mechanism, because if you're resisting that possibility, then you're going to spend valuable time trying to believe or persuade yourself that you're actually right when you're not.

Jim Marous:
Yeah. It's funny, you bring this up and I wrote about it, this week in fact. A concept that I had never heard of before, but loved, one I heard, it was called the pre-mortem step, which was getting the planning committee together and saying, "Let's assume that this project fails, immediately, right front, now, why would it have failed?" Tell me why it would fail.

Lega Glyptis:
What could stop us? I do this exercise with my teams whenever we prepare anything for clients, because I have a client facing role. And the first question is, "Why would they say no?" So, it's not as profound as what you've just said, and I'm going to start doing the pre-mortem, but it is a similar mindset of... Let's start backwards from what we have missed? Have we walked a mile in their shoes? So the first one is always, "Why might they say no?", without fail you find something to add or reflect on. And the second one is, "What are our redlines? Where are we not going to go, either because we don't want to, or because we can't?" The rest is your playground, the rest is where you need to, sort of, find what works.

Jim Marous:
It's funny. Every single thing that we're talking about, I keep on putting my head "Leadership, leadership, leadership." because if you don't have the ability to look at these things differently, if you have management that says, "I really like what we're doing, can we just throw money at it?" and... It was interesting, Chase got criticized and applauded at the same time with the fact that they committed so much money to R and D. And having spent some time in China, I realized what a different perspective the Chinese business had around innovation, R and D, and all the other things, as a percentage of the revenues, how much they put back into the business to stay ahead of it. And it's interesting because you can't just throw... As you said earlier, it's not just about buying technology, it's about leadership. We look at this overall, and we look at the fact that we not only need leadership to think differently, but we're not looking for new tech talent, when we're looking at those people or those organizations that can understand the future, can understand technology, can move us there quicker, how do we train current employees and how do we find more teams or more staff, or better staff, to do what needs to be done in the future when we're really going to somewhat unchartered ground?

Lega Glyptis:
Oh, so, I'm actually taking notes, because you've said so many... There's so many gold nuggets in there. So, let me start by saying that the observation you make about R and D is very valuable, and one of the big alarm bells of our time is that the balance that banks have tried to strike in innovation, of trying to do new things, create new things, but always tie them to the bottom line, is a losing battle, because unless you go into full on R and D where you don't know what you're going to find, and where you might actually fail at the thing you're doing and discover something else along the way, you're not doing R and D. And I think we need to be honest about the fact that banks are so far behind the rest of the economy right now that they should leave innovation to others and actually apply what is true in the rest of the economy to their own estate. So, it shouldn't be about innovation, it should be about adaptation of technology, here and now, to catch up with the economy, right? So, in that way, the talent question becomes even more valuable, because you have 1000s, 100,000s of people working across traditional banks whose skillsets will become redundant at an alarming rate.

Lega Glyptis:
And the banks currently are creating new capabilities over here, with new teams, they're not bringing people along, and if they are, it's in very, very small numbers. And when they're building capabilities with new teams, they have a massive challenge in that the technologists that they wish to hire don't want to work for them. And actually, it's not just that they don't want to work for them, they mostly don't want to work in the industry. I mean, even on the sexier end of the spectrum inside of fintech, the engineers have a choice to work in gaming or in financial services. There are options, and it's a learning curve to realize that you're not actually the hottest prospect, like you might be for the, sort of, yuppies that were finishing school a few decades ago.

Lega Glyptis:
So, what do you need to do to make what you offer appealing? Two things that banks are not very good at, one, allow for the problem that they're solving to sift into the job description, "Come help us solve one of the biggest problems humanity is facing. Come help us build a system that can scale to serve 5 billion customers at low cost so nobody's excluded." The engineers will be interested in that, but then they will be expecting you to manage them in a way that's respectful and inclusive and not treating them like the, sort of, tiny little cog in a wheel. So, culture, to your point, is how you attract the talent you need. You think about the problem you're solving, which most banks haven't done, articulate it in a way that will make talented people go, "Yes, I want to be a part of that.", and then manage them with respect. Big transition.

Lega Glyptis:
And then you look inwards into your own team, how do you upskill the people you have? You look for teachability, and you look for the Jims of the world, and for those of you who haven't read my piece, A Banker Goes A-Banking, volume seven, was published this morning, Jim is my relationship manager in my legacy bank, and our Jim here mentioned that he just found a way to solve the problem. He focused on his customer, me, he focused on understanding the dysfunctions of his own organization, and without breaking a single rule, helped me navigate. Find Jim. Find Jim because you will have 100s of Jims in a legacy bank, you probably have no idea who they are if you sit in your C-suite, so work your way down your trusted lieutenants in the organization and find Jim, because Jim is adaptable, he's a problem solver, he knows what's important, and he'll be teachable. And away you go.

Jim Marous:
I know that your response can be somewhat biased in this, but how important is it for organizations of all sizes to partner with those solution providers that can provide them speed, efficiency and experience in getting the job done rather than trying to build it from within?

Lega Glyptis:
I mean, you are right, I am biased. But I'm biased because I had a strong opinion before I took this job. And I think it's extremely important to go back to basics, what am I here to do? What's my purpose? And what's my value add to this purpose? Everything else is a utility and you should buy it or partner. So, I firmly believe that the value of what we do for instance, as 10x, is we create the absolute best in class utility for someone who wants to have truly creatively unique digital capabilities on top. And the fact that I know what my niche is, and that's why it is not a competitive advantage between banks, but it's a hygiene factor, you want to scale and bring truly digital but robust and services to the market, you need your plumbing to be solid, but you don't need to build it yourself.

Lega Glyptis:
So, I think it goes back to that question we were having earlier, leadership that knows their purpose and know where their uniqueness is... Means that everything that is unique to your purpose needs to be yours, everything else is all about what you were saying earlier, speed. Buy it or partner.

Jim Marous:
They're all intertwined. And, by the way, people are succeeding at this, not everybody's failing, and, you brought up earlier, just because you are fintech doesn't mean you have this answer right. Because you may have the technology stack, you may have the insights, but you may not understand banking. It's a ying and yang situation, we have to solve for both.

Lega Glyptis:
That's absolutely right.

Jim Marous:
So Leda, the concept of digital transformation is still relatively undefined, in some cases misdefined for many organizations, how can an organization get prepared for the future? But more importantly, even though they may think they have started, where do they need to start?

Lega Glyptis:
Such, such potent questions? You'd think you're looking at this and going, "Oh my God, what are you guys doing?" Digital transformation as you rightly point out has been a cultural term, and is usually a department inside a bank and they do projects. And that by definition is the wrong place to start. So, if we pause that, not because there isn't good work going on, but because it's good work that could be chasing its tail for a really long time, the fundamental question that every bank needs to ask itself is, "To what end am I doing all of this?" The beginning of the digital transformation journey 15, 20 years ago was about shopping, working out which new ideas, which new technologies, which new business models might be appealing to the bank. The reality today is that we operate in a fully digital economy and increasingly in fully digital societies, where we... Our interaction with the state, with our own assets as a citizen are becoming increasingly digital. What does that mean? It means that your identity for print is digital, it means that everything is real time, it means that you expect your assets to be interwoven and communicating with each other, and you expect things to become transitioning seamlessly between activities. You expect the hard work to happen in the background.

Lega Glyptis:
So, if we are operating in the fully digital economy, digital transformation for a bank, isn't about what they think they like from the fintech world out there, but what is it that I should be like to be viable in a fully digital economy? No bank is thinking that right now. And the reason that no bank is thinking that right now is that they haven't seen anyone really do it so well as to scare the rest of them, even the challengers are either too niche or haven't actually grown their balance sheet enough to be felt as true challengers. But the time will come, and to reference the point you were making earlier, there is enough big tech out there that understands truly digital economics and how true digital economy scale that you might get a sideways intervention where banking services are provided as part of something else, and consumers will naturally gravitate towards ease.

Lega Glyptis:
So, digital transformation isn't about what you're going to do next on a journey that is undefined, but it's about hitting the brakes and going, "The economy around me is digital, and I still have five different systems that don't talk to each other and a mainframe called mainframe.", that's a true story from a bank I worked in, and all of that means I have manual work around, end of day reconciliations, systems that don't talk to each other and, sort of, humans running around, tying them together with sticky tape. It's not about how I bring that into the future, it's about, "What am I trying to become?", which sounds really big and scary, but ultimately all the time we squandered in the last 15 years means that it's time for a leap.

Jim Marous:
Boy, it's interesting Leda. I'm halfway through an article, today, I was on my dog walk and listening to an audio tape and all of a sudden something hit me, and it was something that the person said on the show, and they brought up Nike and about emotional branding and all these... All of a sudden hit me, I realize, up until now, we all selected our bank based on convenience, maybe the fee structure, maybe it was a recommendation from a friend or a family member, and banking had been pretty much the same, no matter what organization, they are the same products and same services, maybe a little variance, but overall, you knew what you were getting. There was no emotional connection. You talked about it today. You are not using the bank that you're talking about very often, and your emotional connection has gone elsewhere.

Jim Marous:
I think we're getting really close to a point where, because of personalization, because of data, because of the ability to go after segments, we have the opportunity to be, and I'm going to take it even bigger than you took, I think, the Nike of banking. What do I mean by that? When I'm wearing my Nike shoes, it identifies who I am, what I like to be considered, what I want people to think and... People buy things, that's why NFTs are doing so much right now, because people want other people to know that they believe in X, whatever that X may be. I think we have the opportunity right now, more than ever before, to make different, to make it so that there's an emotional brand awareness and connection with a financial institution that goes outside of the transactional part of banking that we're all used to. Possibly, is emotional branding or the ability to have an emotional connection with a bank brand, what banks should really be searching for right now? Because the technology and the services provide all that, there's not going to be that much differentiation shapes and so you've got to find a way.

Jim Marous:
I mean, what's really different between a pair of Nikes and a pair of on clouds or a pair of Adidas, there's a pair of Reeboks? We make it think that there's a big difference, but the reality is, it's how emotionally connected we are with that brand. You look at Amazon, you look at Apple, you look at Nike, you look at Disney, these organizations are able to charge more because they've made, over a number of years, not overnight, a connection with a consumer that they say, "I want to brag about using this organization." Now I brag all the time about PayPal and about Acorns. Acorns gives the way they make savings so dog uneasy, and PayPal, because they actually know me more than my business bank does, and I really appreciate that. I'm talking about it all the time. Do you think this is the missing piece and it all works together? I mean, it's leadership, it's data, it's technology, it's personalization. Is this maybe where banking can go if they do things well?

Lega Glyptis:
You paint such a beautiful picture. And let me look at it from a, sort of, narrow angle. When we talk about emotion, people invariably think about love or self-identification, and I think that is definitely an option, but if we take it to the widest possible sense of a range of positive emotions, then what I would say is that, money is a means to an end, it's a, so that, I always call it. You want the money to buy yourself a house, afford an education, build a bridge, even the people who make money for the sake of it, actually fundamentally want the security of a better life, they want wealth and the status that comes with it. So, money is a mediated layer in our lives for something, whatever that is. And financial services is a layer that is mediating the mediated layer. So, it's a set of activities that are in the way of you and the thing, be it life, government, infrastructure, commerce. So, we are a so that business, you engage with a loan so that you can build a house, you credit... Well, so that, so that, so that.

Lega Glyptis:
So, we have, for so long, been in control of the conversation, power dynamics towards the consumer scary language, distance, always feeling that you're... Have you ever felt in control of your life when you're filling out a banking form? No, you're convinced you're making a mistake, right? So, that power dynamic is not accidental, it's absolutely intentional. And as digital capabilities are coming in and they're softer and they're more human centric, that is becoming more and more and more jarring. Banks need to look at themselves and go, "I'm either of service or I'm just in the way." So, I think that a bank that perceives its purpose as being of service will create an emotional connection, because if you feel that, "Yes, I need a loan to afford what I want to do, or I need credit, or actually, I have a little bit of savings so let me put it to work." If you feel that this intermediary is working for you, has your best interests at heart, will give you options, you'll pay for it, no problem, you pay for your Nikes. But if you feel that the institution is of service, then you will absolutely have an emotional connection. Like I haven't left that bloody bank because of Jim, Jim leaves, I'll walk out with him.

Jim Marous:
Yeah. It's interesting, because we talk about that and we talk about when the bank stops putting everything in perspective of how they can make it more efficient. We continue to have this view that banking is truly out for their bottom line, and they prove it daily. The challenge though is, now with personalization, we'll be able to use AI to determine what I might most likely be wanting to do next. All of a sudden, you can be of service. If you can help me live my life more securely with a better financial wellness perspective and where I think you're actually on my team trying to make me wealthier, I'm going to have you be a part of that, and, by the way, I won't mind you giving a slice of the action. I mean, look what we do with Amazon? Who would've thought, 10 years ago, I mean, we all got involved with Amazon Prime when shipping was going to be free, well, now everybody offers free shipping but nobody has pulled out their Prime account. Why? Because on a daily basis, Amazon delivers almost perfectly, and whether if you know it or not, you have an emotional connection with them. And-

Lega Glyptis:
And also when they don't deliver perfectly, they have impeccable customer service. So, I'm with you. I pay for my Amazon Prime with absolutely no compunction, I have never regretted a penny, and it is the customer service.

Jim Marous:
Well, and it's also that... We all justify it, we'll say, "Well, I want to have the access to the movies, I want to have access to the books." You're going... Nah, it's not, it's because they do it right. And I don't have a problem sharing that with them. You know what's interesting is, we're going to, I'll call it post-COVID for lack of a better term, in an almost post-COVID world, now more than ever, people are more aware of sustainability, equity, equality, a sense of community, does this also become part of this overall emotional brand that finance institutions have a chance to grab at more than ever before? I mean, the awareness is higher, banks aren't expected to do it, but if they do it well, if they show that they're trying to lessen their carbon footprint and they give us examples, I mean, I know my business bank, its really put a lot of effort into making it a sustainable financial institution with green walls and all kinds of things that are very evident to make me aware, "Oh, by the way, we're doing this." Does this become part of this overall brand in the future for banking?

Lega Glyptis:
100%, but it has to be true, because we are in a world that is extremely visible, for better or worse, I'm not going to suggest we're in a big brother environment, but we are... It's much harder to pretend and hide, and I'm not... I will confess that's when I feel my age, I'm not a huge fan of the metaverse, it makes me feel ready player one vibes a lot, but the metaverse actually creates even higher levels of visibility than we've had through social media and the, sort of, constant commentating. And one of the things that I do like about this constant visibility, is that it's really, really hard to get away with just pretending, just lipstick on a pig, greenwashing or paying lip service to your innovation credentials or your diversity credentials, you're visible, you are living your life out in the open in a way that creates immediate accountability, I'm a fan of that, I must have admit I believe that accountability is super important. So, everything you're saying Jim is absolutely true, the challenge is that you need to really do them.

Jim Marous:
Are you going to be authentic?

Lega Glyptis:
You can't just talk about it, you have to be authentic, you have to be committed and you have to be consistent.

Jim Marous:
What is great? And Nike was just one of these things I came across going, "Gosh, what a great example." because they have not done everything right, they got into trouble for overseas production, all these things, but they continue to work at fixing it, they're the first ones out there when there's a social issue that's got to be addressed, and they're not doing it for brand purposes alone, they put their money where their mouth is. As I was doing research for the article, I was amazed by the things that they've done internally to make it better. Authenticity, as you said, in our economy now, social media, if you mess up, they'll react quickly to it. So, as we wrap up here Leda, and God, I hate to say that because we can go on forever, you said at the very beginning, banking has never been more fun than it is today, so what is the biggest opportunity that you see in banking?

Lega Glyptis:
Oh my God. I could say so much. I think the biggest opportunity for the banks themselves is to be purposeful and profitable at the same time. There is this misleading and completely erroneous belief that you can either do good or do well, and banks have historically have lost making social responsibility initiatives over here, and other stuff over there, and it's still happening, I'm hoping we're coming to the end of this, but the way our technology operates at the moment, the awareness, the information we have, it presents us with choices, you can't have your cake and eat it, but the sort of duality of doing good and doing well isn't there. Now, we need to see the purposeful leadership we've been talking about, but there's absolutely no reason why you can't be hugely profitable and purposeful. In that context, I think banking will reemerge as a very attractive career for the brightest and the best. It was a very attractive career because it was so lucrative for a very long time, then it stopped being particularly lucrative.

Jim Marous:
You could do it for [crosstalk 00:46:21] Honestly, I came out of university with the thought that banking's the best because I can have my whole career doing different things, and I go up the... I mean, all the things we laugh at now, I can go up the ladder if I do well. And if I paint the picture correctly, it lasted five years at the bank I start with, and they did nothing wrong, it's just that I was growing at a different pace than they were providing. And all of a sudden you go, "Geez, I wasn't thinking I'd ever changed my job and I'm going to change." I'm staying in the career, I'm not going to leave the career, but I'm go-

Lega Glyptis:
100%.

Jim Marous:
And what's the biggest risk?

Lega Glyptis:
Well, the biggest risk is humans make these decisions, right? And the most limiting factor in every human, and we all have it, is that no matter how insecure someone might be, it's next to impossible to imagine the world without you. And if you're in a big office, okay, we're all home now, but the fundamentals of a big office, the solidity of the balance sheet, and the footprint, it feels impossible to imagine a world without all of these. So, even though we talk about transformation in such a radical way, and everyone nods, when they go back to work, the reality of the environment around them, the view from their desk as I call it, is so solid that they fall into incremental shifts from where they stand, not starting backwards from there they're going to.

Lega Glyptis:
And that is the biggest danger, it's how we've squandered so much time and creative energy in the last 15 years, there is not much time, the future can and will happen without you, the view from your desk is very reveal today, but so was Carthage before it was burnt down. And I'm not saying anyone is going to burn the banking district down, but it's not as binding as its solidity would lead us to believe, and I think that is absolutely the biggest risk, and we've seen it play out already, this belief that we have time and we have the choice, and therefore we'll do things at our own pace, it's just the worst choice and it's constantly being made and remade.

Jim Marous:
It's challenging because as bankers, we are taught from the day we walk in the door, the first day of the job, risk avoidance, as opposed to risk management. Leah and my team know, I've used this story a couple times in the last couple weeks, but the whole concept of a ropes course, if you don't let go of that first rope on your first attempt to grab the second rope, it gets further away, it doesn't get closer, and it gets more and more difficult. So, if you are fearful of letting go and going into the next rope, the reality is, it's going to be more challenging the next time, and the worst case, if you end up in a parallel position to the other rope and you realize there is no way in hell I'm ever going to be able to get to that next rope... It is not fun. Change is not fun. It's fun talking to you because I know that that fear of change and that fear of failure is so outside your realm of consciousness right now and it's something we try our hardest to teach everybody on the podcasts and the writing and everything, "Guys," I'm going to use the Nike, "just do it." because the fear of failure is going to be your failure, as opposed to the ability to have success.

Lega Glyptis:
I'm going to tell you a little story which may be completely misinterpreted on my part, but I used to work in the same building as Bear Stearns before, boys and girls Bear Stearns used to be a very big institution, they don't exist anymore. So, I was in the same building as Bear Stearns, and you could see their people coming in and out in the lifts, lunchtime, and the day before, they went under. I used to work in... As I said, I grew up in operations, so I used to work in a delayed interest claim process re-engineering group, glamorous, and we had an outstanding delayed interest claim of about, I don't know, $5,000, that Bear Stearn settled that day, overnight they went out of business. I don't believe the person who settled the claim wouldn't have laughed in your face if you said to them "Tomorrow you won't be coming to work because Bear Stearns won't exist." And it was hours away from collapse, and we didn't know, I mean, maybe someone higher up in the food chain than me did.

Lega Glyptis:
But it's real and it's possible. These guys completely collapsed under the weight of the financial crisis, but becoming obsolete, becoming irrelevant by losing all the valuable pieces of your value chain and being left with maintaining expensive, cumbersome and loss-making components, that is also a painful way to go, and it is possible. And these guys who settled the delayed interest claim had no idea that what they doing is, kind of, making the last payment before locking the door.

Jim Marous:
And now more than ever, that can happen faster than ever before, because the ability for customer to close an account and open another one is instantaneous, it is... I look at Wells Fargo, so four years ago when they had the debacle with the sales thing, if that happened to today, the reaction would be even more radical because people could quickly make the decision, "I don't want to be associated with that organization.", and they had to recover. And, oh, by the way, the recovery is quick, the recovery was quicker than it ever would've been possibly before as well. Thank you so much. Before we get off the air, can you tell people, again, how they find Leda Writes?

Lega Glyptis:
Leda Writes is available on FinTech Futures every Thursday, there's also a back catalog. If you have a very rainy Sunday afternoon with nothing to do, I can be found at Leda Glyptis on Twitter and exactly the same on LinkedIn

Jim Marous:
Leda, it is always a pleasure. I love getting together, you can see, I always come away saying "I have so much more to learn." But thank you so much for your time today.

Lega Glyptis:
Thank you for having me.

Jim Marous:
Thanks for listening to Banking Transformed, raise a top five banking podcast and winner of three international awards for podcast excellence. If you enjoy what we're doing, please take a little bit of time to show some love in the form of re view, it helps us continue to get guests like we have today. Finally, be sure to catch my recent articles on the Financial Brand, and download some of our reports on the Digital Banking Report. This has been a production of Evergreen Podcasts. A special thank you to our producer, Leah Longbrake, audio engineer, Sean Hoffman and video producer Will Pritts. I'm your host, Jim Marous, until next time. Remember, we cannot become what we want by remaining what we are.