Charles Darwin said that “it’s not the strongest or most intelligent of the species that survives but the one that’s most adaptable to change” but a lesser known quote by Darwin is “In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.”
The Darwinian model suggests that scarcity drives evolution. There are several ways to approach scarcity. You can fight over resources (in the red ocean for the same customer for example), you can seek out new resources (a blue ocean strategy) or you can cooperate and access resources new and existing. Evolution teaches us cooperation trumps competition. Coopetition, collaboration and synergy – not competition – are responsible for many of nature’s most enduring creatures.
The Portuguese Man O’War
Although it superficially resembles a jellyfish, the Portuguese man o’ war is a siphonophore. A siphonophore appears to be a single organism but is a colonial animal composed of small individual organisms called zoöids that have their own special function for survival. Zoöids are attached to one another and physiologically integrated, to the extent that they cannot survive independently. Survival requires a symbiotic collaborative relationship, where the individual works as a whole to ensure long-term survival.
Over half of the animals in the open ocean drift in currents. They literally go with the flow. The man o’ war floats with a gas-filled bladder, topped with a vertical membrane that acts as a sail.
I do not work in a bank, although many of my clients are banks or are in the fintech and financial services sector. From wide research, eclectic reading across a wide range of disciplines and interviews on the Innovation Show, I think the bank of the future will evolve using similar survival techniques to those of the man o’war. To go with the flow of the waves of disruption, a bank will have little choice but to adopt such a strategy. The sail of the man o’war will be akin to the brand of the bank, the leadership and the strategy team. They will enable the bank to go with the flow and adapt to changing environments. Existing retail banks enjoy an existing customer base and when they will migrate the majority of their customers to their own digital banking platforms they can become the trusted and secure financial provider of choice.
In essence, the bank of the future will be a superorganism, acting as one entity despite consisting of individuals. Like the man o’war the bank will consist of composites akin to lego bricks. This is already a reality thanks to Application Programming Interfaces (APIs), which are a set of tools that enable different software components or systems to effectively communicate with one another. Using APIs, the superorganism bank can incorporate the technology from FinTechs. This reality means a preference for collaborating with what was previously seen as an enemy but is a frenemy.
Just like evolution taught the man o’war collaboration was the best strategy, so too will banks and fintechs adopt a similar strategy. Each zoöid within the man o’war has its own special function for survival. In a similar vein, each fintech is specialised in a specific domain within the banking superorganism. With the speed of change, the demands of regulation, the dual transformation of the legacy bank and a future mindset, it is simply impossible for a large organization to achieve sustainable growth in every niche of the financial services sector. Unbundling of banking services has enabled nimble startups to specialise in a chosen domain. A smart bank of the future will identify best-in-breed startups and rebundle them into their new organism.
Many of the earth’s most enduring organisms from ants to bees encourage specialisation. Likewise, the successful bank of the future will incorporate composite specialists into their superorganism rather than trying to compete on all levels. This approach will not only optimise survival for legacy organisations but will create an ecosystem that caters to changing customer demands. This combination of specialism and diversity applies not to only the most successful organisms, but also to the most successful organisations.
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