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Leda Glyptis on Mastering the Intricacies of Banking Transformation
Discover the truth behind banking's innovation revolution with the formidable Leda Glyptis, a banking consultant and author who sheds light on the metamorphosis occurring within the industry's venerable institutions. In a revealing conversation, Leda recounts her serendipitous foray into the banking world amid the chaos of 2008's financial upheaval and the burgeoning fintech movement. We unearth the human stories that drive transformation in this sector, wading through the myths to spotlight the individual efforts that fuel systemic change. Leda's insights cut through the industry's stereotype as a bastion of risk aversion, illustrating instead a landscape ripe with strategic partnerships and innovation, all while keeping an eye on the personal stakes involved in effecting change.
Tackling the challenges of enacting internal change, especially for those just starting their careers, this episode is a trove of strategy and experience. Leda reflects on the complexities that knowledge alone cannot dismantle, acknowledging the more intricate barriers that await eager innovators. We traverse the frontiers of fintech, where untapped markets brim with potential, and discuss the delicate tango between established banks, neobanks, and tech giants. As we wrap up, Leda teases her forthcoming book and we delve into the entrepreneurial spirit coursing through banking's veins. We close on a vital note, discussing the critical importance of mental health for entrepreneurs—an often overlooked but essential facet of long-term success in the tempest of innovation. Join us for a conversation that's as insightful as it is essential for understanding the future of finance.
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Ian Horne:Welcome to the Money Pot. I'm Ian Horne, the EU Head of Content at Money 2020. We're closing in on our 2024 show in Amsterdam, and this episode of the Money Pot podcast is our third of four that focus on big topics that we're bringing to our stages. At the right, the show is so close I can almost smell it and today we're going to look at an absolutely core theme, which is the future of banking and the dismal frustrations and galvanizing optimism that is surely felt by everyone who tries to innovate from within a bank. I'll introduce our guests shortly, but first let's hear from my co-host, Sheryl Chen, Asia Head of Content. Sheryl, hey, how are you doing today?
Sheryl Chen:Hi, good morning, I'm doing well, thank, you?
Ian Horne:Yeah, good to have you here. As ever, I've got a question for you before we bring in our guests. I mean, we're talking about innovation today and the challenges of making that happen within major banks. Now in Europe, there's a feeling that banks are often slow to respond to change. They're risk averse, they're stuck in their ways, technologically and culturally. I can't ask you to speak for all of Asia, cheryl, but you're in Singapore. Does that description resonate with you at all?
Sheryl Chen:So the interesting thing is I get feedback from both sides. So one camp definitely feels that banks, they do take a bit longer to innovate, but the other side says that, like banks, right now, they have a lot of partnerships, a lot of innovation arms. That's definitely piloting a lot of monumental projects, so that's also definitely worth noting. So it's pretty balanced, I guess.
Ian Horne:That's a diplomatic answer.
Sheryl Chen:I'm just trying not to get.
Ian Horne:No, it's a good idea. I can't blame you. I can't blame you. It's too early in your career for that. Anyway, let's get on with this interview. You might have heard a second laugh there, and that laugh was from author and consultant Lida Glyptis. Lida, it's a pleasure to have you here.
Leda Glyptis:It's my pleasure to be here. I really loved the diplomacy in your answer. |Sheryl's thinking all of these people are my clients, all of these people are my partners. Yes, you're doing great.
Ian Horne:Yeah, I think you're absolutely spot on there. Yeah, Sheryl, you've got to invite these people to speak on your stages too. I hear you. Look, I guess, Sheryl, shall I let you start. I'll give you a question.
Sheryl Chen:For today we're here to discuss banking innovation, which is a major theme in your book- Bankers Like Us: Dispatches from an Industry in Transition - but this book is also about people and the value of perspectives, so please tell us about yourself and your background in banking.
Leda Glyptis:Thank you for that. As I mentioned in the book for those who have already gotten their hands on it my arrival in banking was entirely accidental. It was not planned. In fact, I did everything in my power to resist it. I did not want to be one of those people who finished university and just fell sideways into a career in banking. Resistance was futile.
Leda Glyptis:It took me a few years, but I did exactly that, and it was to my absolute horror that I realized that I was both very good at it and really enjoyed it. It was a massive, massive identity shock, because that is not how young me saw myself. But this accidental arrival also happened accidentally at a very interesting time because, counterintuitively, I joined the finance world just as the major 2008 crisis was picking up steam and as the fintech wave was starting. Neither of those events foreseen or planned, but they made for almost 20 years of absolutely fascinating time, and I've held positions inside banks, mostly in technology transformation and then innovation and the the last few years also technology companies, largely in the core banking space. And, and as ian mentioned at the beginning, I'm independent now, advising startups and banks on why it's so hard and what we can do you say a lot of things there that will resonate, I think, with so many people.
Ian Horne:I mean, the one thing is falling into the industry. Right, I feel like most of us maybe'm wrong, but I feel like most of us fall into it and maybe don't originally think of ourselves as, say, bankers or financial professionals or whatever. I guess my first question on that, lita, is your original perception of the industry. How accurate do you think it was? You know, reflecting on what you know now?
Leda Glyptis:I think it was. You know, reflecting on what you know now, oh, what a good question. Um, I? I think there are a couple of of things that come with age. Right, my original perception of the industry was that of a of a liberal arts humanities student in the 90s, so I had a view of myself out there idealistic and pure, and the capitalists over there, which I hope most 18 year olds go through. But the world is not that simple.
Leda Glyptis:The second view, once I realized that actually capitalism is neither uncomplicated nor universally espoused, even inside its uh, its temples that are bags is is that you come into um anything that is huge and impactful, so government, um any big bureaucracy, any, any, any banking institution, but also big pharma, manufacturing, anything that is so big and impactful. You come in assuming that there's a lot of control and intent. You come in assuming that the people at the top are doing things intentionally, with sort of, if not full, control of the consequences and at least awareness. And what the biggest um shock and realization and opportunity for me going through this at the early stages of my career, is that actually there's more inertia than intent. People come in and try to do their best work every day.
Leda Glyptis:I'm not one of those people who think people are idiots or manipulative sort of self-interested agents. People come in of course there's self-interest at heart, but everyone gets out of bed trying to do their best work and things go terribly wrong after that, and largely it's because what we assume is intentional, ordered structures is actually a lot of inertia, a lot of habit, as I talk about in my book. A lot, a lot of people coming in and doing exactly what they were taught to do in the best way they can, even if that's not what is needed. That was my biggest lesson where you assume intent, there is more inertia. Yeah.
Ian Horne:And that's really interesting because, yeah, they're organizational issues as much as they are human ones. I think also to get into the book a bit more. I mean, in many ways you're telling personal stories about the battle to get banks to embrace disruption right and in that regard I can imagine the book probably serves as therapy for a lot of people. I can imagine you've had that feeling.
Leda Glyptis:Oh God, yes, yeah I can actually see reading it.
Ian Horne:So having read, like you know, much of it. I've not quite finished yet, but I've read most of the book and I can totally feel that coming through, but also, you know, at the same time who do you think needs to read this book the most?
Leda Glyptis:Is it the banks themselves, the people at the banks, and I guess if a senior leader it up and it will resonate are, exactly as you said, the people who feel this way, and this is therapy. I think the book is useful to two categories of people. One is the technology leaders, startups or otherwise, who sell into banks, and we have had a long period of assuming that certain things will fall by the wayside. You know, you have a lot of challenger organizations, startup organizations, trying to do B2B sales into banks and going oh, it is terrible that it takes five years to get a yes and eight months to onboard and therefore the bank should change. And the answer is you're both right. You're right that it's terrible, you're right that the bank should change, but also you can't wait for it to change to do business. So actually having a little bit of empathy around why banks are so hard to do business with and where you might be able to help decision makers inside the organization, go with the grain of what it is they're dealing with. I think there is definitely something helpful there. It doesn't mean you should perpetuate broken structures, but if you're trying to sell into these people. Actually understanding what their days are like is important.
Leda Glyptis:The second group are indeed, as you suggest, the bankers, the decision makers, be it of a different generation or of the generation that grew up with a frustration and galvanizing optimism, as you put it I really like that and they're now in positions of power and they're facing a lot of the same decisions that people faced when we were junior and we're realizing that actually it's hard to make the right decision on incomplete information and a lot of constraints, and my biggest takeaway for them is that we have some really, really big things to do ahead of us, and they're so big that most decision makers find what they do in the day and what they need to do strategically really decoupled.
Leda Glyptis:So when I do masterclasses on the back of the book, we talk about the big themes that we mentioned in the book, but the thing I always leave the teams with is what are you going to do differently on Monday? Because the biggest takeaway is if you have to do something really, really big, it is so easy to see your day-to-day decisions as disconnected from it, but they're not. So if you're going to take the first step towards this impossibly long journey. Better do it now. Better do it tomorrow morning. And what can you do differently? With consistency, no matter how small, because once you get that under your belt, you'll do the next thing, and the next thing, and the next thing, and none of it will feel big and momentous.
Sheryl Chen:But before you know it, you're actually on the way yeah, that's really interesting because you talked about the initial inertia that prevents people from acting on things, but also you're giving this advice on, like let's say, you're moving, you're going into the office on monday, you just need to start now. But do you have any actionable advice for these people who are currently on the front lines and trying to make things happen? Like how can they be even more strategic with starting now? Like how do they convince their stakeholders?
Leda Glyptis:So I do have tons of advice and actually I organized the book in a way that's like okay, here's all the theory.
Leda Glyptis:If you want to skip it, here's five things you can do. But I like the two things you picked up on People on the front line who are actually doing work but who also want to be strategic, and that is always a difficult balance to keep. So I would say to that and the book is organized thematically and that's for people who are interested. There's a how-to guide in there. There are things you can do intentionally at an individual level, at a team level and at an organizational level, and no matter what we are told by our bosses, you can only operate within your own sphere of influence. So no matter how gifted you are as a junior VP in product, you cannot change the way that your organization approaches its cost to serve and redeploys capital to have affordable products. You can't do that. The board can do that. The executives can do that. You, no matter how talented you are, you can't do that. You can build the technology that enables the bank to do that. But I think the first thing for the people you described, cheryl, is to identify their appropriate sphere of influence. Now, keep aspiring, keep going, but to actually not crush yourself. You know that proverb they do not take on the weights of the world. They will do nothing but crush you. So the first is appreciate what's your appropriate sphere of control and influences. It will keep changing as your career changes, but you can't take on the world right now. The second thing is identifying how small things in your day actually have a big impact to both how the organization works and your teamwork. So if you see someone being a total, total terrible person to a colleague and just let it go because in five minutes you have a hard stop and another meeting to go to, you're the problem. If you're in a situation where somebody that's one of my favorites, right People double spending budgets I don't know if your organization does that, but banks do it all the time You'll go into a meeting, you'll go through the budget and you'll be like Ian, you've got 5 million, cheryl, you have 5 million and I have 5 million, which means we each have to cut whatever it is to get to the 5 million. We agree, nobody likes it, but we agree. We leave that room, we go into the next room, there's some more people coming in and we talk about a 20 million investment and you're like wait, is that? Do I now have a 30 million cost cut target? Or is that a different pot that you were talking to me about? So actually allowing that meeting to take place without anyone saying, guys, the emperor is naked. We just talked about cost cutting in the last room. We need all the numbers to be true at the same time. Nobody does that. Nobody does that because because it's easier to just go with it and solve it in a back room, because it might come out in the wash, because the project might die anyway.
Leda Glyptis:Again, if you want to be strategic and if you want to be impactful, how many meetings where totally insane things happen do you go to in every day and you don't call them out? Can you call them out without damaging your career? It depends on your sphere of influence. So there are a lot of things that people can do, no matter how junior, at the appropriate level, because you don't want people to start doing the right thing and losing their job as a result. Right At the appropriate level, to start bringing more sanity into our work. And as we bring that sanity, we will start going. Well, what is this for? What does it do, and am I using it in the right way?
Ian Horne:you know we're using our time and our resources in the right way and you start building a snowball effect, starting from very, very seemingly small but actually profoundly changing um acts of resistance yeah, that's a really interesting perspective because I can imagine when you started trying to transform banks from within yourself, that wasn't your mindset right, and I'm just wondering if there are things that you tried. I don't need you to be specific, necessarily, but in the past when you've tried to enact change that was maybe three or four rungs above your pay grade. Are there things that you did that you would do differently now and, in a way, do you still?
Leda Glyptis:you know you must surely still sympathize with that person that wanted to make board level change happen when you were relatively entry level. Oh god, 100, 100 um. So when I started, I and because the digital revolution was only starting, because I'm old, um I firmly believed, and I think if you speak to anyone who's in their 40s and has been in the industry for the entire journey, we all really believed that what separated us um from where we wanted to be aspirationally was learning. So actually it didn't feel inappropriate to our level in the organization to bring that information, to do the hard work of learning the stuff and distilling it and then bringing it like a gift to your seniors and veterans and say, look, this is what is available, this is what is possible. I now know that that wasn't the obstacle and I think anyone coming in through the ranks now also knows that that wasn't the obstacle. And I think anyone coming in through the ranks now also knows that. I think that was a moment in time when we all believed that if we learn, things will fall into place. Now the reality was everything that fell into place was actually very complicated and needed knowledge and actually um events such as yours started bringing the industry together so we could learn together in an accelerated manner. There was a a period where things felt more possible than than they do now in some ways, even though we have moved on a lot and we're doing much, much more and, as Cheryl said, there's a lot of like really bold plays being carried out by various banks I think that the two things that I was not prepared for.
Leda Glyptis:So, to answer your question, ian, I wouldn't wish to do anything differently, because being naive sometimes gets you places. I had a very jarring set of experiences and a very amazing set of experiences. The jarring set of experiences was that when I brought things to the organizations that I worked for that were uncomfortable and they were new for me as well, it's not like I was coming in with 20 years of knowledge and machine learning. I was bringing things that I was learning as well. It's not like I was coming in with 20 years of knowledge and machine learning. I was bringing things that I was learning as well. So there's a bit of a humility and a little bit of awareness that you're not the world's deepest expert in some of those things.
Leda Glyptis:The pushback was always personal and the pushback was always diminishing, not of the technology, necessarily, but of the people, and that has been a universal experience. And I talk in the book about being called sweetheart by someone who didn't want to hear about APIs, and so there was a really bad sort of ad hominem pushback from people which I should have been prepared for, but I wasn't, and I wish I had been prepared for that because it actually was more upsetting than it should have been. The flip side of that is when you don't exactly know where the boundaries are, because these things are new, you have this attitude of if I push it, does it go boing, which a friend of mine has told me will be on my tombstone because that has been my life. So because there were no like.
Leda Glyptis:Now, every organization has pretty rigorous innovation parameters. In order to do a pilot, there's a process and a form and sign, and back then there was nothing. So actually you needed to believe that the boundaries were further out than they are, and very often they were, because a lot of things that we pushed went boing and a lot of things that we expected resistance from actually were welcoming and open and things that should have been easy were not. So having no assumptions meant that we banged our head against brick walls quite a lot, but it also meant we tried things that if we knew better, we wouldn't have, and that's valuable. So being naive, actually, and starry-eyed is great, because now I have more reach, I have more experience, but I do catch myself at times going, oh, it's not going to work.
Ian Horne:Yeah, it is really interesting and your book makes several points along those lines of people being perhaps overlooked or ignored a bit because of their age, their cultural background, their gender. And when you look at the underserved markets in fintech, these people actually represent the biggest opportunities most of the time. So I think it's kind of interesting that we can have that or something goes wrong with the tech in everyday life. People usually hand it to the younger person in the room, so there's all sorts of things like that.
Ian Horne:I mean yeah, I mean I'm making some very sweeping statements there which probably could be challenged a little bit but I think there's something in it.
Leda Glyptis:There is definitely something in it, and I've started work on my second book now, and one of the things somebody mentioned in an interview is it was specifically about VC funding that particular piece and it was like if you give 50% of the population 2% of the funding, which is what women and ethnic minority founders get, 2% of the funding goes to them. So more than 50% of the population actually get less than 2% of the funding and startups are failing at a 95% startup rate. Maybe the case for change actually doesn't need any more argument, but we accept a lot of this as given. So, yes, you're right, a lot of the people that are underserved, underrepresented, undersupported are, cumulatively, a global majority Plus. What we're doing now isn't working, so maybe it's time to shuffle the deck.
Sheryl Chen:Do you think banks have done a good job of fighting the threat of new banks and other disruptors, and should banks also be concerned about big tax involvement in finance?
Leda Glyptis:What a good question. So let me take it in order. Do I think that banks have done a good job of fighting off the threat of neobanks? No, absolutely not. Um, but I think they may have been spared the worst of the threat, because if you look at neobanks globally, there are only a couple of them that are beginning to show signs of being financially viable. Economically viable, actually weren't hell-bent on a viable business model. They were not necessarily looking at how they're going to monetize amazing UX. They were opening up a new way of operating and the rest would come. And what we saw a lot in the more mature economies was that the big banks copied features. So we had a series of copycat features from the biggest banks in your region. Almost 10 years have gone on and most of the new banks are now bringing in bankers to help them become profitable. I don't think the story is over, but I think that if I were a big, established bank now, I would be like well, we dodged a bullet there. No, thanks to something specific we did. We dodged a bullet there no thanks to something specific we did, but we dodged a bullet there. That might come back to haunt us Meanwhile to your very valid point.
Leda Glyptis:Big tech is entering the fray and is doing three things that neobanks didn't have. It's starting with pre-existing scale. So we've uh over the years that banking only makes money at serious scale. You need you need scale for for the um, for the unit economics to work right. So these big tech players are coming in with existing scale and and customer stickiness and it's one of the things that the mox business model in hong kong got so right partnering with someone that had that scale.
Leda Glyptis:The second thing is that big tech companies have flexible and cheaper tech stacks. So if you think banks tend to have some very exciting new stuff and some very dusty old stuff running at the same time, creating actually quite a complicated cost model to deliver your services, big tech companies have more streamlined costs to serve. So you have scale and cheaper operations and in most jurisdictions, and actually particularly in Asia so you know this better than me, Cheryl the regulator is much more comfortable with those big existing players because they're already regulated in some other capacity. So we're not looking at capital adequacy and going concern considerations that you had with the NEOs when they started by five friends and a big idea. These are big global players who can actually make the financial side of things work, and they already have some relationships with the regulator.
Leda Glyptis:So, did the banks do a good job of dealing with the NEOs? No, Did they do a good job of learning from the NEOs? No, Did they do a good job of learning from the NEOs? Yes, Is the NEO threat over? Not yet, but I would agree with the implication of your question that the biggest threat comes from big tech, exactly because they have scale, reach, sustainable unit economics and they're ready to go at economics and they're ready to go.
Ian Horne:And one thing we should go over quickly is your session in Amsterdam. We're going to talk about the kind of cycle of innovation happening within banking and then people leaving banks to launch their project and then ending up back at a bank. I don't think we should tackle all of that cycle now, but what really intrigues me is the fact that people leave the banks to launch their innovation, and my question in relation to that, lida, is what can banks do here? What should banks do to make sure they can keep that innovation in-house, should they want to? And do you think strategically, most banks are getting this right or wrong Big question, but I figure may be useful for someone who's trying to define strategy at a bank.
Leda Glyptis:I think it's a brilliant question and I think there's a couple of layers here and I'm sure we'll spend longer talking about it at the session. There was a big exodus and you're absolutely right. A lot of people left banks to start their startups and I think we all have a little bit to answer for, because for a long time, we in the industry created a language almost like a playground language. Everyone was friends, everyone wanted everyone else to succeed, the opportunity was endless and there were all these incubators and mentoring programs and boot camps and people were were seeing actually a very false view of entrepreneurship. So I would say that there was a wave in the last few years of people who went into entrepreneurship expecting it to be easier, and there's been a very, very hard reality check because funding has been harder to come by than they thought and it's about to get much, much harder as we're going into a very constrained funding environment. Having a startup idea that gets a couple of people excited and some seed funding is not the same as having a viable business. So we saw a lot of people going into entrepreneurship naively, getting crushed which is awful and coming back to the job that will allow them to pay the bills. I think that naive view of entrepreneurship has disappeared. Like 10 years ago we were talking about, we were almost encouraging everyone to be an entrepreneur. Now you see incredible resources and I see that Money 2020 Asia is covering mental health and entrepreneurship, because entrepreneurs are under immense strain. So I think the fact that we're not naive about what being a founder is anymore means that there will be a lot of self-selection, a lot of people who actually, yeah, they get frustrated of their day job, but they don't want that. I think that piece resets the conversation at a more stable reality.
Leda Glyptis:The second half of the question that you ask is both about talent and product. So, if I have a brilliant idea, why would I stay inside the bank and not take the risk, but also the upside, of doing it myself, and I think part of it is risk reward. We need to be realistic. The upside is bigger, but so is the danger. The second is ways of working, and I'm sure that, with folks from Metal on the panel and Capital One, we will be talking about the fact that it is possible to make working in a bank feel different to what I describe in my book Not 100% different, because you're still regulated. You still have certain things to go through, but then again, if you're selling services to financial services entities, you're going to have that anyway. So can you change the ways of working to make talent more attractive?
Leda Glyptis:But the third piece and again it's taken us a long time to actually have an honest conversation about this is about business model viability. Is the thing you're trying to do, working playing nicely with how the bank makes money? If yes, then there should be a home for you inside the bank and there should be a home for you inside the bank and there should be a way for you to make money with a bank. If the bank looks at it and goes, this will lose me money. So I need to make sure you don't go far and you're here where I can see you, because someone's going to do it and I want to have control over it. Then that becomes a more problematic view.
Leda Glyptis:So, to recap, I think that the hordes that we're leaving banks are not going to be a problem anymore. For reality check reasons, I think retention of talent and ideas has to be about ways of working, about honest risk reward conversations and about that viability, because we see a lot, I see a lot um and that hasn't changed over the last 20 years of people coming up with an idea and taking it to their bosses inside the bank and the idea is essentially destroying the bank's business model or destroying the bank's margin in a particular vertical or geography where they're very strong and you can see the bank going. I'm not going to do that, but I also don't want you to do that anywhere else. So I'm going to create a little pilot and keep it small so that if it gets to the point where it will happen inevitably, I'm there, but I'm not going to do it to myself. Understandably, right? If you're making 80% margin on something, why would you kill it? So these conversations have to come to the fore and they have to be more honest.
Leda Glyptis:I don't think it's going to be as much of a problem as it was before, but changing ways of working to retain talent is hard, and the one thing to say then I went off on one, but the other thing to say there is that we very often thought about banking as the apex of people's career aspirations, but it isn't anymore and the people that we're trying to attract have options, and those options are not fintech or bank.
Leda Glyptis:If you're an engineer, the option could be e-commerce, gaming, it could be, government, it could be. We're in a digital economy, right particularly for technical talent. They can get salaries that are as good, if not better, and ways of working that are much, much more interesting, and you know, they will have a snack fridge full of goodies rather than having to pay for their coffee in a terrible machine. So we have to be realistic about the hunt for talent, and it's not as linear as it used to be. We're trying to have the best people work for us and the best people have more options than ever before, and banking isn't as sexy as we would like it to be.
Ian Horne:I think that's a really, really fascinating point to finish on, lida, and I can't wait to hear more about this debate when we're in Amsterdam, too. I think you know there's a few things I take from this. One is that change is really hard right, whether you're the incumbent or you're the person trying to push it through, and it's honestly really great to get that guidance on it, because so many people must be frustrated in their roles right now or possibly frustrated listening to people trying to change things the whole time, and there are obviously lots of difficult, honest and open conversations that need to happen within banks and elsewhere, and I feel like, with your guidance, maybe we'll have better conversations.
Leda Glyptis:I hope so, so.
Ian Horne:Lida, thank you. Thank you for your insight. It's been really good chatting with you. Thank you so much for having me, guys yes, and that is it for this episode of the money pots. Again, thank you, leader, for joining us today and if you want to hear more from her, as I keep saying, leader will be speaking at money 2020 in june at the rye in amsterdam and we hope to see you there and, of course, you can be part of the money pots at our money 2020 shows.
Sheryl Chen:please feel free to send your pitches to podcast at money2020.com, and don't forget to follow us wherever you listen to podcasts. Thank you so much for listening. We love our FinTech nerds.
