“Thirty years of rock and roll and I end up spending an early morning in Las Vegas talking to bankers – success?” Geldof joked.
The famed Live Aid organizer may have been out of his league when discussing the sub-prime mortgage “mirage,” but the authentic, free-wheeling and artistic tone set by the rocker is exactly what bankers need to be absorbing as they look toward a tough 2008. The theme of this year’s Retail Delivery Conference was, officially, “The Profit Paradox” – how do banks meet near term earnings challenges while building for the long term? The agenda was packed this year with high-profile speakers speculating on current economic challenges as well as another round of overly prepared and slick presentations touting the need for industry innovation.
For Gonzo, some of the slickness and highly “professional” content at the conference was actually what made us most uneasy. It’s “nice” to hear what Wachovia is thinking about or actually doing, but from the other 8,000+ banks that don’t move $524 billion in assets, we didn’t hear any gritty stories of bankers actually doing something “innovative.” The most gut-wrenching need in our industry right now is to be real again – to be alive with creativity, spontaneity, adventure – basically to rock again.
And rock is just what Geldof did for the bankers. In an industry full of rational lenders and bean counters, Sir Bob drove home the point that the real word, the better world is not just about staying between the two white lines. “To put faith in science and business is to believe in magic,” he warned, characterizing businesses as “much better at deliverables and executing plans than navigating an uncertain world.” Better than any business professor or management guru, Geldof articulated what innovation should really mean for bankers:
Geldof’s own personal stories of trying to start a newspaper, founding Live Aid and obtaining debt relief for African countries gave him credibility with the audience. He proved that successful “entrepreneurs” don’t need a formal education, just the personal commitment to do something.
And doing something is exactly the message bankers should take with them. There’s been plenty of talk about innovation – it’s the new buzz everywhere. The Bank Administration Institute has worked hard to create a nice platform for the discussion and bring in high-profile speakers to prime the pump. It just seems our industry is having trouble turning this talk into real action. Even worse, while we stall and worry about rising non-performing loans, focused non-traditional players like PayPal, ING, Virgin Money and Wal-Mart will be plowing ahead with new growth plans.
Only You Can Prevent Buzzwords
One of the biggest inhibitors of innovation was that there was way too much buzzword bingo in many of the presenters’ materials. In one breakout presentation, the speaker used the term “seamless integration across all channels” more than 10 times – we’d rather hear Geldof use the “F bomb” than that dribble. There’s also this immense need for bankers to be overly prepared for conferences. WAMU CEO Kerry Killinger and others had these silly PR videos prepared with the flashy colors, offbeat camera angles and banal “fake” interviews that we’ve all come to loathe. (“I think what makes us different is our culture and our people.”) It wasn’t innovative – it was sterile. When the COO of Wachovia was asked to pontificate on an “out there” prediction for the years ahead, he replied that in 2008 Wachovia would be focusing on “small business.” Whew! It was dousing out the innovation flame like a fire hose. And GonzoBankers, the oversupply of stilted content and buzzwords has got to stop if we’re going to make any progress.
Hat’s off to BAI for setting up the party, but all of the party guests need to show up with a bit more grit and attitude on their set list or the gig is going to fall flat. It’s really not up to BAI to change the language of banking conferences – it’s up to the industry speakers and attendees. While Alan Greenspan noted, “You can’t predict innovations or they wouldn’t be innovations,” it’s important that we all start bringing more real-world examples to the table.”
The Economic Blame Game
This was clearly one of BAI’s best years in terms of keynote speakers. Gonzo admires the foresight for having Alan Greenspan and Steve Forbes only two weeks after one of the worst economic times in our industry in 15 years. A key message came out of these economic talks: things will be tough but that cannot slow bankers down from pursuing opportunities. Hiding in a cave is not a good strategy. What was truly amazing at this year’s conference was how deftly everyone from the Fed Chairman to big bank executives worked to distance themselves from the financial mess grabbing headlines today.
British financial journalist Gerard Baker did a good job challenging Greenspan as to whether loose monetary policy and complicity toward exotic mortgages makes the Fed at least partly at fault. While Greenspan was simply amazing with his grasp of the complex world economy, the folks at Gonzo think he’s a bit too smug about being an innocent bystander in this mortgage mess. For instance, Greenspan mentioned proudly how fixed rate sub-prime loans are doing fine today and it’s really the adjustable sub-prime that has caused issues. However, in 2004 Greenspan helped support the American “ARMs race” with this famous statement in front of a CUNA annual conference.
Come on, Alan, you can’t be bashing ARMs in 2007 after painting them as innovative in 2004.On the counterpoint, publisher Steve Forbes was very effective in challenging some of the Greenspan pride. He equated the economy to an engine that needs the right amount of fuel to operate effectively and implied that today’s situation has been wrought by “flooding” the engine with cheap money in recent years. Forbes also gets great marks for being just plain hilarious. When discussing the sub-prime meltdown, Forbes blithely joked that banks became huge fans of “NINJA” loans – no income, no job, no assets.
Through all the economic discussions, speakers and bankers feared an overreaction from the regulators concerning the mortgage market – some fearing new regulations could become as onerous as Sarbanes Oxley. Let’s hope that doesn’t happen or we all won’t get around to innovation until 2017.
And Now to the BAI Floor!
While the keynote speakers clearly stood out as the highlight of this year’s conference, the floor of the BAI show was somewhat disparate in terms of themes and buzz emerging.
Mobile Banking Buzz
A lot of new players in the booths were talking up the mobile banking market. Players like ClairMail, Mobilearth and mFoundry were getting some attention around their booths. The biggest buzz on the floor during Wednesday’s show was the announced purchase of wireless provider Firethorn by technology powerhouse Qualcomm. Firethorn CEO Tripp Rackley and Qualcomm’s Joan Waltman were happy as can be about the $210 million deal.
Everyone else on the floor seemed a bit envious of the price Rackley nabbed for a company with immaterial revenue – but big deals with AT&T and Verizon had put Firethorn right in the middle of all the action. Sounds like entrepreneurship – you seem to have the magic touch, Tripp!
No Sign Yet of the Perfect Kiosk
While this year’s show was loaded with the usual cast of ATM hardware providers, there didn’t seem to be anything new in terms of self-service. One financial executive lamented to me, “I’m still looking for that perfect, Web-based device that can do everything the branch and Internet banking can do without the people.” It’s odd to still see so much ATM competition when per-ATM transactions continue to drop with the rise of debit and credit micropayments.
First Attendee to Shamelessly Ask for a Gonzo T-Shirt
Sharon Custer, BMI Federal Credit Union. Congrats to Sharon for scoring such a valuable asset before any of the thousands of other bankers at the show.
Old Friend Award
Dan Fisher, Copper River Group. The Gonzo teamed has worked with Dan the payments guru for almost 20 years. It was good to see Dan and banker William Stephens of American National in Danville, VA, checking out the latest check and epayments solutions. Dan was hottest on the Enterprise Cash Management suite from De La Rue.
Level 5 Leadership Award
Chris Hyer, Idaho Central Credit Union. This recently retired CEO was scouting around for the next new thing in financial services. Keep an eye out with this guy. Chris took a tiny credit union to more than $600 million under his helm and he’s got one of the best leadership styles the Gonzo team has ever seen.
Biggest Attention Getters on the BAI Floor
The red Ferrari that was being raffled off and the yellow Hummer that Steve was hoping to grand theft his way out of the showroom. Steve, you’d look like a total dork in a Yellow Hummer.
Most Pragmatic Solutions on the Floor
Tie: The cool campaign management tools from Conclusive Marketing (formerly Synapse) and the ready-to-go intranet tools from the folks at Passageways. Eric Fisher and Ben Prickel of Passageways were psyched about their new Gonzo T-shirts.
Celebrity Sighting on the Floor
Gonzo’s Scott Sommer thought he was hobnobbing with Claudia Schiffer until he found out it was a hired Metavante booth babe. Might as well throw away the autograph, dude.
Coolest New Front-End Software Idea
The folks at ECONIQ had some pretty cool stuff with their customer profiling software. Because branch employees hate to toggle between a CRM system and a core system, this software actually uses only the real estate on the left side of the screen and “listens” to interaction on the core system, providing context-sensitive prompts based upon keystrokes on the core screen. Kind of cool if your bank can’t wait for the be-all end-all integration at the end of the tunnel and wants something working now. S1 has picked up these tools to be part of its Enterprise retail suite.
Coolest Gadget on the Floor
Maria Arminio and Roger Applewhite of Avenue B Consulting showed us this very cool USB-driven card reader from Magtek that can detect if a card has ever been skimmed. The potential for this device is to conduct “card present” online transactions from a home PC. Now that sounds like it would totally rock!
Biggest Irony of the Show
Several marketing and technology companies were promoting economic “sustainability” during the show while others were acting very anti-green by shoving unwanted marketing flyers under every attendee’s hotel door. Save some trees, guys!
The red guys at the Panini booth were just plain spooky and they annoyed Steve more than the worst mime.
Rock Through the Hard Times
It’s clear from the tone set at this year’s Retail Delivery that 2008 will be one tough banking year. Trying to gauge when housing has stopped slipping will be an important activity, but so should some more realistic, specific and actionable ideas from our industry. Hard times seem to excite bankers because they can get their hands around bad loans, restructurings and layoffs. Yet, getting our hands around the new ideas, the “flames” for our industry’s future, requires an equal focus – or else, some day we might need Geldof to drum up a “Feed the Bankers” concert. Let’s avoid that.
P.S. Thanks to the folks at BAI for letting us be part of the party. Great keynote speakers and a special salute to Mike Beird for working to get Geldof. Awesome job, mate!
“As soon as I wake up every day,
I look at the papers to see what they say,
I know most what I read will be a lot of lies,
But then you learn really fast to read between the lines”
GonzoBanker’s Terence Roche and Rocker Bob Geldof…
both Irish… both mid-50s… both crazy…