Given the disruptive technological advances many industry insiders anticipate, Consumer Bankers Association (CBA) President and CEO Richard Hunt told attendees at the CBA Live 2018 conference opening general session that the next five years likely will be the most important of their banking careers.
The industry’s abrupt shift in focus from regulatory compliance to 21st Century solutions was blatant in the results of one poll question the association has been asking its members every year since 2012: “What will be the top issue facing our industry over the next three years?”
The answer “Innovating and creating new products and solutions” garnered one-third of the audience’s votes while “Navigating through a new regulatory environment,” the No. 1 answer each of the first five years the question was posed, was picked by only 4 percent of attendees. Last year was the first time the topic of regulatory compliance was not picked as the most prevalent concern. That distinction went to “Attracting (the) new generation of consumers and employees.”
Hunt also took a few moments to go over CBA’s four main objectives for 2018, which are: forming a Consumer Financial Protection Bureau commission; right-sizing federal student lending; the next generation of banking; and balancing regulation and enforcements. CBA’s Sam Whitfield previously spoke to Dodd Frank Update about those matters.
With an eye toward the future, the session started by revisiting the past. Attendees were treated to a short film from the 1950s envisioning a thrilling future where cars don’t need drivers and finances can be managed on electronic “viewing screens.”
Obviously, it would seem that the filmmakers either had a crystal ball or were exceptionally well in tune with technology, enabling them to accurately predict where it was headed. Flash forward to the modern day and the need to predict, with a degree of accuracy, where technology will take the industry over the next 50 years or so is more imperative than ever.
That is where Scott Klososky comes in. The author, bank board member and business investor told attendees that one of the most frustrating things he hears from companies is the mantra, “We go seventh.” That refers to the mentality some banks take when new technology is introduced into the marketplace. Those companies will wait for at least six other companies to adopt it before they get in on the action, with the intent to do it bigger and better.
The tendency to hesitate when it comes to change has held the banking industry back, Klososky contended. Rather than becoming defensive when a company brings new technology into the industry, as is a common tendency, Klososky said banks could go on offense by being open to becoming the disruptors themselves.
He encouraged bankers to consider what jobs currently performed by humans could be fulfilled by computerized programs and artificial intelligence.
For the sake of personalizing customer relationships, Klososky stated that the practice of mining social media for customer information will become an unavoidable necessity. With that in mind, he cautioned that banks need to exercise common sense and approach business relationships with some of the same sensibilities as personal ones.
Perhaps the most eye-opening notion Klososky shared with the audience is that humans are entering the “Age of Entanglement” where technology will become integrated into people’s lives in new and possibly controversial ways. He went as far as to say that there may come a time, possibly within the next few decades, when technology not only connects people via devices and data platforms but can be implanted; essentially making them “augmented humans.”
Early in his presentation, Klososky described an exchange he had with a bank owner who scoffed at his assertion that one day every desk in his office would have a computer on it. Only time will tell whether any doubts about Klososky’s technological forecasts will prove as misguided as those of the bank owner.