The Extract is a condensed roundup of digital experience news for financial services institutions, and our take from San Francisco.
This week we look at David Bowie (yes, that David Bowie) and the power of Agile Management. We examine whether crypto is finally ready for the mainstream. Lastly, we try to answer the question of whether people want to do business with machines.
I came across an article published in Inc titled “Why Creative Geniuses Like David Bowie Embrace the Power of ‘Unchangeable’ Constraints. You Should Too.” As a huge fan of Bowie, I had to drop everything and read it. Jeff Haden, the writer of the article and contributing editor of Inc, writes that “constraints can also fuel creativity and innovation and built forward momentum by eliminating the temptation to sift through seemingly infinite possibilities.” Haden describes how Bowie and music producer, Tony Visconti, accepted the limitations of what they had on hand putting together Bowie’s song “Heroes.” The result was an iconic song with sounds that would have been different if “infinite” resources were available.
Haden describes a 2017 study by the Academy of Management Journal that found that:
“employees who found it challenging and even fun to overcome constraints were the better performers, especially when creativity and problem-solving were required… and here’s the kicker: The presence of constraints often caused the performance of those employees to improve.”
It occurred to me that this a very basic principle that informs Agile. Take for example our current situation. For those of us lucky enough to be able to still work remotely, we have come across a series of constraints that has required us to define new ways to work. Command-and-control management has been terrible in dealing with these constraints. However, Agile Management has “come to the fore,” according to Mark Samuels in an article in ZD Net.
Samuels describes Agile Management as a “flexible form of leadership, which involves the application of the principles of Agile software development to management tasks, relies on decentralised decision-making. It breaks tasks into smaller components and integrates planning with execution, which it’s supporters say allows an organisation to create a mindset that helps a team respond effectively to changing requirements.” It is those changing requirements that brought constraints to mind.
Samuels notes that “rather than commanding and controlling, leaders need to give other people the power to make decisions.” He quotes Mark Evans, managing director of marketing and digital at insurer Direct Line, as saying “I went through a change curve, where I could get the idea that I’m not really in control of anything and I’m just sort of facilitating and helping to prioritise and maybe set the overall vision and mission. But, truthfully, it’s a really big deal to jump to that and feel like your self-worth is still there.”
Samuels also quotes Elke Reichart, chief digital officer at travel and tourism giant TUI Group, for her experience in using Agile Management.
“I think we all have to be bad-weather captains,” she says. “Everybody can be a good-weather captain but I think COVID is demanding that we all become very well versed at being bad-weather captains. And being a bad-weather captain means being even more visible for our teams, colleagues, bosses and our stakeholders.”
The ability to deal with “bad-weather”as a manager or team member, allows for creativity to surface. In Agile we talk about a minimum viable product (MVP) which Eric Ries, author of Lean Startup, defines as “that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.” The constraint of “least effort” allows for innovation to surface. The same can be applied to managing teams.
Reichart says “What we had to do at TUI, as we were so heavily affected by the coronavirus crisis, was that we had to make decisions in very short hand within hours or within days. We had to make very drastic decisions that usually would take weeks and months. As an Agile leader, you need to be around; you need to be available.”
Haden summarizes that “embracing constraints–like limited resources, opposing demands, or seeming contradictions–could help you look at old problems in entirely new ways.” We all need this outlook in a world that requires rapid transformation.
Or as Bowie sings “We can be heroes for ever and ever”
Has Cryptocurrency’s Time Arrived?
I assume that if you are reading this you know that cryptocurrency, and Bitcoin in particular, is having quite a resurgence. As I’m writing this, the price of Bitcoin is at $55,249. Compare that to the low in the past year of $3,858. It is no surprise that many people are asking if this is when Bitcoin finally makes it to the forefront of financial services. There are several big names in financial services that seem to think it is.
As noted by Asha Barbaschow in an article in ZD Net, “Mastercard has revealed preparations are underway for the ‘future of crypto and payments’, hoping to start supporting select cryptocurrencies directly on its network later this year.” In turn, Visa’s CEO, Al Kelly, speaking on the company’s first-quarter 2021 earnings call said “Our strategy here is to work with wallets and exchanges to enable users to purchase these currencies using their Visa credentials or to cash out onto our Visa credential to make a fiat purchase at any of the 70 million merchants where Visa is accepted globally.” In the meantime, BNY Mellon announced “the formation of a new enterprise Digital Assets unit that will accelerate the development of solutions and capabilities to help clients address growing and evolving needs related to the growth of digital assets, including cryptocurrencies.” These moves are in addition to existing crypto support by fintech firms like PayPal and Square.
The question we have here at Extractable is: will Bitcoin, and cryptocurrency in general, finally become a true avenue for payments as it was originally envisioned or is it their future to continue to be a speculative asset? As Fitch notes in an article, “The inability to easily use digital currencies with retailers, significant potential price volatility, limited regulation in place today, and a lack of knowledge by the general public limit the ability of cryptos to go mainstream.”
Barbaschow quotes Mastercard’s Digital Asset and Blockchain EVP Raj Dhamodharan “Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants, and businesses to move digital value.” In other words, they want to be ready if the market gets there.
Billy Bambrough in an article in Forbes quotes Cuy Sheffield, Visa’s Head of Crypto, “We see crypto assets as more like digital gold. There’s less demand to spend bitcoin.” And therein is the question. Will people want to use cryptocurrency like fiat, or will people continue to “hodl” in the hopes of becoming wealthy by just waiting?
What do you think?
Digital Customer Engagement
Community banks and credit union executives often tell us that their secret sauce is customer engagement. This is what sets them apart from the larger regional and national banks. They also assert that customer engagement cannot be done without the involvement of a human. Several years ago a community bank executive, who is now a bank president, remarked “people want to do business with people, not machines.” Fast forward a few years and a pandemic later and the world looks very different. Yet, this attitude remains.
In an article in Inc., Shama Hyder, CEO of Zen Media, notes that “research by Salesforce,(found that) 70 percent of customers say connected processes, like seamless handoffs or contextualized engagement based on earlier interactions, are very important to winning their business. In addition, 59 percent of customers say tailored engagement based on past interactions is very important to winning their business.” These types of interactions are enabled by artificial intelligence (AI), showing that people do want to do business with machines.
Hyder refers to a report from IBM that highlights Credito Valtellinese’s use of AI for customer insights. The Italian retail bank “implemented a customer analysis solution that uses AI to identify, capture and index unstructured data along with online shopping habits and personal financial arrangements.” The customer “profile is used to build highly targeted segmentation models for multichannel marketing campaigns.” The report says “As a result, the bank has seen a 10 percent increase in campaign conversion rates.”
Closer to home, “Bank of America reports 70% of consumer client households and small business clients and 77% of wealth management client households are digitally active, and the company’s 39 million digital clients are increasingly adopting key features in mobile and online platforms,” per an article in Retail Customer Experience. The article quotes David Tyrie, Head of Digital Banking at Bank of America, “The client is at the center of everything we do within our digital experience, which is guided by three core principles: it has to be in the client’s best interest, provide information and advice that is relevant and timely, and always offer the choice of the next best step.”
Ready to be the hero?
If you feel that you’re having a hard time defining how to operate in a world where people do want to do business with machines, contact us and we can help you.