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Laurent Haug's newsletter, issue #12

This week: a playbook for the digital world, the "uneasy symbiosis" forming in the financial industry

Laurent Haug

May 24 · Issue #12 · View online
News and thoughts on society's ongoing transformation.

This week: a playbook for the digital world, the “uneasy symbiosis” forming in the financial industry, the death of tablets, Google looking for new ways to collect data from our homes, and what happens when your car has security flaws. If you received a forward of this newsletter from a friend, remember you can subscribe to receive the next edition here. Have a great week!

A playbook for the digital world
As someone who has been fighting to explain what digital technologies were about to change in our world for the past two decades, I have many times been in this situation of facing a skeptical executive who needed to be convinced that 1) it was really about to happen 2) it was a huge disruption 3) now is the time to act. Over the years, I’ve been able to refine my arguments, seeing that certain things connect better, while others make people feel threatened and looked down on.
I’m happy I’ve found Emakina’s Digital Transformation Manifesto, because this document, although not perfect, is full of simple slogans that really capture the essence of digital transformations, and will help me convince the last remaining skeptics of the urge to embrace digital. There are points I like, and others I don’t, so I’ll go over them hoping to lure you into downloading a PDF that is really worth it.
Points I like
  • There is no hiding from digital
  • There are seven billion experiences to be created
  • Yesterday’s management models have run out of steam
  • Digital is not a tool. It’s a state of mind [That’s why it’s so hard to learn…]
  • Digital is not a separate department in the company
  • Companies must become “experience companies”
Points I think are true today, but were also true in the past:
  • It is vital to break the boundary between customers and staff
  • There’s no customer experience without an employee experience
  • Disrupting oneself is better than being disrupted by others
  • It takes time for things to happen quickly
  • Talent first
  • You sweep staircases starting from the top [changes start at the top]
Points I think are simplifications:
  • There’s no room for second place [not entirely true: lots of companies are number one on the market they are interested in, their city, region or country]
  • Digital transformation is essential [applies to many businesses, but not all]
  • Digital in brief : making things simple [I would say “making things customer centric”, not necessarily simple]
  • No, the staffs are not digital dummies [still a challenge to many companies to bring senior employees up to speed]
  • Tomorrow’s companies will be horizontal and multi-sector [I’m always very defiant towards these kinds of generalisations, as I’ve seen human beings do business in so many different ways]
Points I don’t agree with:
  • The global village is becoming a jungle (competition is fierce) [imho saying “the rich are getting richer and the poor are getting poorer” would have been more accurate. Companies like Google or Apple are building empires that will be almost impossible to displace]
  • The digital culture isn’t bought. It’s experienced [and in a company you often create experiences by buying them]
  • Only polymaths will win [I’m pretty sure there is a lot of room for experts of all kinds in tomorrow’s world]
Banks and fintech: it's complicated
I remember talking to Anthemis founder Sean Park at his home in late 2011, as we were preparing his speech on reinventing finance that became one of Lift’s most watched talks of all time (video).
He was sharing with me his vision for the future of finance, and something was unusual in his discourse: oftentimes when you talk to an entrepreneur trying to disrupt an industry, they will tell you that the future is made of new players kicking the butt of clueless incumbents who become totally irrelevant. Sean’s vision was more subtile, that the future would be a blend of new and old players.
That’s why, from day one, Anthemis has been a company investing in fintech startups while, at the same time, advising the largest financial institutions in the world on how to create smart digital strategies. This raised - and still raises - a few eyebrows here and there, but let’s look back a bit. Did music startups kill the majors? Did digital distribution kill hollywood studios? Not really isn’t it…
Today, it seems this balanced vision of the world is getting a bit of traction, and one of innovation’s important rule is sinking in: very often, innovation complements more than it replaces. Incumbents move late, but have key assets (in banks’ case: reputation, regulation, track record, clients’ access, capital, data) and have a real shot at being relevant in the new world if they make the right decisions.
Although it’s calling it “an uneasy symbiosis”, the Economist has a great writeup of the financial industry’s current situation:
The best thing anyone can say about banks is that they will always be around. “People like to whinge about them but they will never leave,” says Neil Rimer of Index Ventures, a fintech investor.
And why would they? Day-to-day banking is not such a bad deal. Customers can store their money safely and get at it instantly, usually even from abroad these days if an ATM is to hand (remember travellers’ cheques?). They can cash in their pay cheques and settle bills. This costs them little or nothing, and everything is backed by a government guarantee. […]
Moreover, banks have done fairly well with moving their services onto the internet and then to mobiles. These are two major transitions that have fundamentally changed the way people handle their financial affairs: few industries successfully manage even one. Given their size, banks are perhaps not as incapable of evolution as their fintech critics make out.
So it may not be surprising that fintech has failed to break through in what most people would recognise as day-to-day banking. No startup has successfully made a play for the centrepiece of people’s financial lives, the current account. Banks are making a good-enough job of this in a highly regulated environment unappealing to many outsiders. […]
The threat the startups pose is not that they will topple banks as linchpins of the economy. Most fintechers are not interested in the complicated, regulated bits of banking. The threat they pose to incumbents is that they might just seize the profitable add-ons, from loans to payments services and investment advice—anything that generates fees. It now seems increasingly likely that they will manage to “unbundle” at least some of these extra services banks offer their clients. […]
Incumbents are likely to copy, license or buy many of the innovations served up by fintech once they have proved popular. Banks did not invent the ATM but they co-opted it efficiently. Wealth managers will do the same with robo-advisers if they keep attracting new money. For any large financial firm, it would not take more than a few weeks’ worth of profits to gobble a fintech star.
Tablets are dead (obviously)
When I see numbers like these, coming from the latest Criteo Mobile Commerce Report, I can’t help but think that tablets are soon to be dead. People in Japan and Korea are just ahead of time, and whatever they are doing will spread to the rest of the world in the next 5 years. I never owned an iPad as I never saw a need between my phone and my laptop. Now with phones getting bigger, that gap between both devices disappears even more, and you start to see products like the Surface 3 that are downright merging all of the above. If there was such a thing as iPad stocks I would not be buying them right now.
Google Aims to Patent Child Toy That Pays Attention
Future Humans Will All Look Brazilian, Researcher Says
Google's latest self-driving prototypes are heading to public roadways
Hacker Says Attacks On 'Insecure' Progressive Insurance Dongle In 2 Million US Cars Could Spawn Road Carnage
Here's how Peter Thiel's college dropout entrepreneurs are doing - Business Insider
Startups and tools
Twitter co-founder Biz Stone invests in Deepak Ravindran's start-up Lookup
InSpread, next generation spreadsheets
The Audience
Automatic: Connect Your Car to Your Digital Life
Google Tone
This week's link for parents
How cultures around the world think about parenting
“We are called to be architects of the future, not its victims.”
R. Buckminster Fuller
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