Pictured: The most powerful women in banking. By Carol Realini (Author, BANKRUPT: Why Banking is Broken. How it can be Transformed.)
The book "BANKRUPT - Why Banking is Broken. How it can be Transformed" was a decade in the making. It started when I was traveling in Africa in 2002. I was taking a long needed break from being a technology entrepreneur and was supporting a non-profit working in central Africa.
It was my first time visiting a place where the infrastructure was severely lacking; transportation, roads, electricity, water, and health care – nothing worked. Yet even in 2002, many people had cell phones. That is the first time I imaged a world where everyone would have access to mobile phones.
Since I had just finished building a technology company, I started to think about what else besides basic communications could be done with all these cell phones. That is when I realized in my lifetime it might be possible for everyone to have access to banking through his or her mobile phone. For people with limited or no access, this would be transformational. For the rest of us, it would just mean more convenience – and potentially lower cost banking.
In 2005, I went back to technology to build a mobile banking company. I was involved in launching next generation banking solutions in Africa, India, and even in the United States. At the same time, I saw how slowly traditional banks were embracing new models of banking, especially in the US.
In fact with the recent financial crisis, things slowed down even more. Sure we have new mobile interfaces from the banks – but the products are the same behind the scenes. If anything banking got worse with people having underwater mortgages and increased everyday bank fees.
During the last 5 years, I saw first-hand the struggles within the banks to support innovation. I have been in countless meetings with bankers all over the world. One thing I have heard over and over again is that when they let their hair down, the universal comment emerges: “We don’t know how to make money from small depositors.” In addition, it was clear there was too much emphasis being put on protecting traditional revenue streams, not enough of disruptive innovation. Even when innovation received initial support, it was frequently bogged down with business constraints and internal organizational struggles.
When I retired from my mobile banking company in 2011, I felt unsettled about what was happening with banking, especially in the US. There is a lot of industry hype, but a alarming number of underserved and unhappy consumers. The big banks have especially lost their commitment to serving everyday people by providing affordable banking services that empower people’s life and work.
In the US, the number of Americans opting out of traditional banking is reaching new heights; 106 million Americans are cash preferred. Many of these Americans are hardworking women – many I wrote a book about what I thought needed to happen – especially given the financial crisis. Crisis' forces change – which is painful, but it can also be good.
I want so much to inject a sense of urgency and a big vision for the banks as banks recover from the crisis; a vision of affordable banking for all and a reorientation of the banks to delighting their customers. This is a moment in time similar to the moment when Steve Jobs returned to Apple – a time of crisis that he turned into an effort to build a great foundation for the future.
That opportunity is there for the banks. What is at stake is banking for all, global competitiveness in banking, and customer loyalty. For banks to do this, they have to have a culture of Steve Jobs-like innovation within the banking industry. Being about the customer must be in the very fabric of the banks.
Banks can follow the example of Steve Jobs, who turned around a failing Apple by relentlessly focusing his company on building great products that customers love, and backing them with unsurpassed customer service. Banks have to be about being great at serving the needs of the consumers and business.
Banking boards and the executive teams in the largest banks are primarily Wall Street men. The banks need “new blood” but it may need to come from unexpected places and from women.
After all, American Banker gave Jane Thompson the Innovator of the Year Award in 2011 for her work in providing financial services using Wal-Mart’s strategy of great value at affordable prices. She didn’t even work for a bank. That says a lot about the state of innovation in banks – banks may be adding neat new mobile features, but the core services are overly complex and the rising fees are driving everyone crazy.
Women are a driving force in their families, communities and small businesses. If more women were in top jobs at banks and on bank boards, I believe they would insist on more focus on the customer.
Instead of just figure out how the banks can make money, they can help figure out how the banks can do a better job of serving customer including the average person.
And that is why I wrote the book. The initial reviews are great – and I look forward to feedback from the Women 2.0 community.
See the book on Amazon: BANKRUPT: Why Banking is Broken. How it can be Transformed. Editor’s note: Got a question for our guest blogger? Leave a message in the comments below. About the guest blogger: Carol Realini is a successful Serial Entrepreneur, Board Member, and Author. Until recently she was the Executive Chairman and Founder of Obopay, a leading global mobile banking and payment provider. Carol, a recognized international expert in mobile money, has presented to world business and political leaders at events including those hosted by the U.S. State Department, the World Economic Forum, and the Gates Foundation. Carol also mentors entrepreneurs providing wisdom and lessons learned from her four successful startup experiences.