I’ve blogged on some of the themes I’m going to cover below, but the story gets clearer and clearer in my head the more I blog about and talk about it, so this version may be a little clearer than some that have gone before.

The first is that banks' organisational structures have to move from being locked in, proprietary, tightly-coupled to open, partnering and loosely-coupled. It’s all about plug-and-play, open sourcing technologies based on apps, APIs and analytics. A bank has a strong position in this space, as they own the marketplace today, and should be building the platforms to allow their customers great experiences by connecting with the best-in-class APIs out there.

From an Open API viewpoint, there are 1000’s of start-ups focused upon doing one thing really well, from making a merchant payment (Stripe) to borrowing money (SoFi, Prosper, Zopa) to investing (eToro, Zulu Trader, robo-advisors). The thing is that, as a customer, I have no idea out of these 1000s of firms doing one thing well, which to choose from and who to trust, if any of them. So, a bank should be partnering with the firms they think do these things the best, and bringing them to me through curation.

After all, if 1000s of new, shiny FinTech firms are doing one thing well, how can a bank compete when they’re full of legacy and heritage that means they do 1000 things average? Reboot through co-creation and partnering, and gradually reshape the bank for the 21st century by replacing the bits that don’t work with a partners’ capabilities that do.

OK, OK, so you’ve all heard all that bluff before, but it’s my last few concluding slides that are meant to really hit this point home. Y’see most banks’ leadership teams are fatally flawed, as they’re run by a bunch of old guys who understand banking, but have never had any technology experience in their life. 94% of C-level’s in the banks are bankers; only 6% have any technology experience.

As a result, they’ve dodged the legacy replacement question for decades; they think fast following is okay; they believe they’re immune to technological changes; and they believe that digital is rolling out a mobile app. They just don’t get it. For the very few that do get it, they don’t know what to do.

This means that the bank is currently stuck in the tightly-coupled proprietary avenue but, if the leadership team does get this, they want to move to the open street future.

What’s the first thing they need to grapple with in developing their digital transformation? Culture and leadership. They need leaders who can articulate and communicate what’s going on to staff in a non-threatening way. Unfortunately, I heard one bank CEO recently talking about 1000’s of staff being replaced by robots. That’s not the most sensitive way of articulating the message. I would rather put it more delicately, as Piyush Gupta puts it, and show the people that they have a great opportunity to be part of a change to make the bank digital and, in the process, they are allowed to experiment. They are allowed to try things and, even more importantly, they are allowed to fail.

After all, there are two massive mountains to cross to get to digital: the first is to get the people on board; the second is to replace the legacy. Core systems replacement, if the systems are based on legacy vendors or legacy architecture, is essential.

Then, if you are still working for a bank run by a bunch of old guys, they may feel that a digital transformation of the bank’s culture and replacement of core systems is just too big and ask. It’s not needed. We can still keep putting lipstick on a pig, and the customer won’t notice.

Wrong.

The customer is bound to notice because there are all these really cool, new firms doing things differently. And guess what? If those new, cool firms who do one thing really well all start to group together to do 100s of things well together, how would a bank compete?

If the bank that does 1000 things average, cemented to its past, is not agile enough to update daily and refresh their core regularly, they will be outsmarted by those who can. Those who can will then recognise that the banks are doing 1000 things average, and will naturally come together to do 1000 things brilliantly.

Just watch as the FinTech marketplace matures and the partnering and co-creation ecosystem emerges, how many banks are part of the end game. It won’t be many, but the ones positioning themselves into this space today are going to decimate the ones who resist it.