Change Managers

By Thomas P. Johnson Jr.

For bankers, it's no longer a question of whether to experiment, but how to manage the process.

There's no escaping that on a variety of major issues affecting their industry, bankers no longer control the process. Whether it's account aggregation, electronic billing or Internet banking itself, strategists often find themselves on the defensive, reacting to someone else's agenda.

What's the proper response to such outside pressures? Even if it were possible to pull up the drawbridge, that's hardly a recipe for long-term survival. At some point, the corporation will find itself locked into a decaying business model as customers vote with their feet. The alternative is to manage the process — to assimilate the changes and make them work to your advantage.

The role of software developer, so central to the New Economy, offers a useful analogy. Such a person is forever in flux, not only creating new products but also constantly modifying existing ones and working to fit them into others' applications in a networked world. Version 1.0 of anything never sits on the shelf very long. Such is the mindset that bankers should bring to their own businesses.

It's more than an attitude, of course. Following through entails mastering a variety of software developers' principles. One essential is keeping an eye out for breakthrough concepts. In this issue, for example, we show how screen-scraping has risen from obscurity to a veritable must-have technology in scarcely more than a year's time. A whole new level of responsiveness is required to cope with such rapid progressions.

Once a new technology or business model is in place, it must be carefully tracked and validated, an imperative highlighted in our cover story about credit scoring. As described by author John Engen, computerized underwriting can powerfully enhance the lending process. But its use is prudent only to the extent that banks maintain proper controls and monitoring systems and continually refine their decision models.

There also comes a point when older approaches must be retired. In our roundtable discussion on e-commerce, Royal Bank of Canada chief financial officer Peter Currie says bankers need to be more aggressive about disinvesting in static and decaying business units, even those that still might be profitable. Winding down old projects to make way for new ones is a longstanding strength of technology companies, Currie points out, and helps those firms thrive on change rather than be battered by it.

Managing change effectively, then, involves a continuum of processes ranging from keen alertness to new developments, to measurement and tracking, to handling obsolescence. None of this is easy in practice. But strategists will have to embrace broad principles such as these if they are to stay abreast in e-commerce and other fast-developing technologies.

Copyright © 2003 by Banking Strategies, published by BAI.

back to top