Speech from the Financial Services Forum Annual Dinner 2017

I was honoured to be asked to give the keynote speech at the Financial Services Forum Annual Dinner at the Guildhall in November.

My theme was innovation, disruption and trust building.

You can find the text of the speech following:

Thank you David, for your kind introduction and to the Forum for inviting me to speak here tonight.

The Financial Services Forum has always held a place in my heart since I remember joining in the early years of my career whilst at Deutsche Bank and, of course, I was humbled to win the Marketer of the Year Award in 2008.

I remember being very nervous that night and thinking that I would never win. The chat on my table was excited especially when one of the team came back from a loo break and said that they had overheard someone saying that they had voted for me! Then another person came back from a quick ciggie and she said that she too had found people who had voted for me. So my advice is if you are up for an award tonight, and want to know your chances then I’d hangout in the loo or go for a fag!

Anyone nominated for an award tonight – I wish you the very best of luck.

Tonight I earn my dinner by taking a few minutes of your time to talk about technology and financial services. Finance has been an early adopter of new technology – from the abacus to the mainframe computer and as an industry it has always been critical to our economy. We are blessed that the UK consumer is very open to trying new things. ClearScore, my company, has taken an approach to empowering people with their credit data and we have seen fast adoption, now our product is used by nearly 5.4m users in the UK and 250,000 in South Africa. We have delivered our fair share of disruption. But as I have built my career and operated in our industry I ask myself the question:

What are financial services really for?

Obviously at some level it’s about capital. Looking after money and assets, growing them, making them flow, managing risk. But I also think that at a very deep level, especially in the capitalist democracies in which we live and that are so under fire at the moment, finance is about managing and growing a very different form of capital and that’s social capital or to put it another way trust. In the delicate eco-system that is our economy and our industry, especially in the UK and Europe, trust is in danger of continuing to diminish.

This year’s Edelman Trust Barometer survey showed that still less than half of people trusted our industry. Financial services are the least trusted of all the business sectors and that is as true today as it was in 2007 before the financial crisis. You’ll be pleased to hear that in another survey from 2015 58% of people said all of us working in financial services were at best unprofessional and at worst dishonest.

The good news is it’s not just us. Almost every profession from politician, to journalist, to doctor, have seen decreases in trust over the past 20 years. The media is no longer respected, replaced with news of the royal wedding and Trump’s constant tweeting.

This collapse in trust is very significantly problematic for our economy. Every economy that has thrived has had embedded within it a complex mesh of bonds of trust that help to lower transaction costs. Whether it is the stock markets in the UK or US, or chaebol based families in South Korea, or the local SME business groups that are prevalent across Germany, all of these myriad structures help to make capital flow by creating trust between people.

Almost all change in financial services requires our system to work together at very many levels. We need to operate in an environment where the consumer, the regulator and the industry trusts each other. Now, of course, this mustn’t be blind trust but it also must assume a baseline of trustworthiness otherwise the barriers that we put up to working together, and winning the trust of the consumer, will become insurmountable.

Technology can help build both financial and social capital and it can do it fast. Look no further than Bitcoin. Just this week this new currency broke the $10,000 mark for the first time. The learnings from Bitcoin are numerous. The technology is opensource and transparent. The currency solves several major transaction issues for users in major industries. The system relies on multiple entities working together, competing to create coins but collaborating to innovate around use cases. I’m sure there will be lots of debate over your main course about the outlook for cryptocurrencies but what opensource distributed ledger technology has been able to do is build significant amounts of trust in a very short amount of time and captured increasing amounts of financial capital.

In the UK, for many reasons from Brexit to increasing inequality, I believe we are at a turning point for our economy. Historically we have enjoyed a particularly strong base of trust. From social norms, to our class structure and enduring entities from the Bank of England, to our courts, to the local pub, that have served us very well. And banking has contributed significantly to this system.

The profession of banker was always traditionally seen as solid and dependable. Banks were full of people who were part of our communities, working from buildings on every high street, who were known and were trustworthy and trusted. Products and decisions were simpler, and more transparent.

This reputation for trust across financial services didn’t happen by accident – it was hard won over centuries. We gather here today in the Guildhall at the heart of the City of London Corporation. The corporation is the oldest continuous democratic commune in the world – having existed for over 2000 years. From the Roman’s, to William the Conqueror, to the Stuart’s, the City has survived as a bulwark for the advantages of democracy and free trade, thriving through the rule of law and lots of social ties fostered through Freemen, and Councils, Courts, Halls and organisations like the Financial Services Forum, and of course, the very many bars and pubs that we enjoy to this very day.

But despite this history, our reputation has severely compromised. However, I strongly believe that we can use our collective will, our capital, our ingenuity and technology to redress the balance.

Today the Prime Minister, the Newspaper editor, the CEO are rarely very trusted. Much of the collapse in our reputation is connected with this lack of trust in authority. These authority figures have been replaced by “people like me”. Witness the power of TrustPilot or Glassdoor.

Technology can help bridge the divide between all of us and our customers. The social web, chatbots, artificial intelligence and machine learning fused with real conversations facilitated through video for example allow cost-efficient interactions with a more human feel. Experiences like Cleo which uses AI to chats to me on Facebook about my money every morning, or ClearScore’s financial education chatbots used by more than a million people – these interactions are involving, warm and funny. This can help bring back the human whilst leveraging the efficiency and convenience of a technology enabled bank in your pocket which has often removed human warmth and connection from financial services.

There is no doubt that much of our mind space whether we work for established institutions or small start-ups is dominated by the idea of disruption and disrupters. At one level this is a good thing. The regulator wants more competition, there are still very many under-served consumers, large institutions struggle with new technology, data is opening up all the time, and in many cases markets needs to be made more efficient.

But at another level disruption seem oppositional and aggressive – it creates tension – thoughts of the winners and the losers – it creates sides. And whilst we need to compete fiercely in the market for the good of the customer, dedicating ourselves to delivering better services, at lower cost, more efficiently. We also, if we are to re-establish trust in our industry and rebuild our collective reputation, need to actively support each other and collaborate more.

When I see disrupters attacking banks for over-charging on a foreign exchange transaction, or scandal after scandal from the investment banks, or the government using the regulator through PPI to redistribute money back into an ailing economy, or major financial institutions being reluctant to embrace open banking I wonder whether we are not putting short term commercial gain above longer-term maintenance of the trust that is fundamental to our success. We may win the individual battles, but lose the collective war.

What we create when we attack each other, either through our messaging or our business models, is a confused and untrusting consumer. That consumer is increasingly frustrated with the services with which they are being provided without any real understanding of why they feel this way. All they are left with is a vague sense that they are being ripped off by a system that they don’t understand and is full of bad people doing bad things.

Now whilst there are those in our industry who do the wrong things, most people I know who work for financial services companies are talented, committed people, like you and me, trying to do good things for our customers whilst operating in this sea of mistrust and confusion. Certainly the 160 people who work for ClearScore are some of the most committed and trustworthy people I have the pleasure to know – your teams will be the same.

So, we must continue to execute the obvious functions of our industry well – manage capital, be prudent with risk, help our customers make good financial decisions, create fair and balanced products. But our mission must be to work together to build back the social capital in our industry and our economy.

Tomorrow when we are back at our desks, as we think about our business and brand strategies, or develop our propositions, talk with colleagues and customers, or invent our next new innovation; whether we work for the largest of banks, or the smallest of start-ups, whether we are the disrupted or the disrupters we should take a moment to think back to this evening, to this wonderful room, and the history it represents.  We should dream big about the application of technology to solve real customer problems. But above all everyone of us should dedicate ourselves to continuing to win back the trust of our nation through hard work and our ingenuity collaborating to build a better, more trusted, more trustworthy financial services industry. To achieve this would be a true contribution of which we all can be rightly proud.

Thank you.

Apple Rumors: The iPhone 6, the iWatch and the Apple innovation engine

What and when will the next iPhone appear and will it be the iPhone 6? I blogged back in October 2011 at the disappointing launch of the iPhone 4S which was Apple's first major product launch post Steve Jobs that I thought that there were signs that the world's greatest industrial innovation engine was slowing. This has undoubtedly turned out to be true and Apple are now under serious pressure with their stock falling consistently. I am an avid watcher of Apple rumors mostly because I think they are a fascinating organisation that is going through huge change right now.

What is going on at Apple (I think)…

The press and markets are in a frenzy at the moment as hedge funds and investors drop Apple. They say that Apple are losing the war against Samsung in the high end mobile phone market, have no cheap iPhone option for developing markets and haven't released a breakthrough innovation in years. Here is what I think is going on……

The truth is that Apple have only started to come to grips with the loss of Steve Jobs in the past few months and what's more we shouldn't be surprised.

Steve Jobs was the tech-genius of his generation – a unique and irreplaceable leader. His loss will be felt in Apple and the world for many, many years. From the many people who I have talked to who have worked at Apple – it is an egotistical, difficult and political place to work. Remove the king pin from this type of corporate culture and a power vacuum results. This creates in-fighting and a land grab. Tim Cook has only recently started to come to terms with this with his sacking of Scott Forstall in October after the maps debacle and the appointment of Jonny Ive as a Steve Jobs replacement responsible for both hardware and software.

I think the top team at Apple are only now coming to terms with the absence of Jobs and in a place where they can get back to the tough process of innovation. They have some key challenges which they need to overcome in order to deliver a series of launches and products which will either underline Apple's dominance as an innovator or start the Microsoft style slow steady decline to mediocrity. With the up and coming changes to the iPhone franchise, the iPhone 5S, iPhone 6 or iWatch Apple need to prove their innovation capability in a post Jobs world. 

The most pressing problem for i-devices is software not hardware

iOS which spans iPhone, iPad is increasingly becoming THE operating system for Apple but it is not just looking old and tired but is behind on key usability features. The core strengths of iOS were always its functionality, usability, ease, consistency and reliability. It is still easy to use, consistent and reliable but it is now lagging in core features to make life and communications more functional. Android and Blackberry 10, even Windows 8 Phone, now have a significant advantage in really useful features that bring information, communication and organisation to my day. For example Blackberry with it's Personal and Office modes, or Windows 8 Phone with live tiles that tell me the weather, or Android with it's more integrated message centre. All these developments have left iOS lagging. Witness the wild success of the Evasion Jailbreak on iOS devices: 8,000,000 downloads so far to see how much demand there is for more functionality and flexibility. 

Here I am hopeful that the integration of software under Jonny Ive will deliver major benefit and improvements in functionality.

I think iOS 7 is going to be a big deal and it needs to be.

It needs to take the elegance and robustness of iOS and combine it with a more integrated and seamless communication feature set. Email needs to be overhauled, messaging needs to become integrated, communications from contacts integrated across channels, there are many improvements that can be made. It will also have a facelift I think. All this needs to be delivered in the next iPhone device which leads me onto my next thought on Apple rumors….

iPhone 5S will be next around April 2013, then the iPhone 6 in late November

Apple iphone 6 iphone 5SWhen is the next iPhone due? There is no doubt in my mind that Apple are convinced that the iPhone 5 is a good product and a worthy competitor to the Samsung SIII – Apple still believes in high end design principles based on consumer usability rather than fancy feature packing. And shipments back them up! The iPhone 5 continues to sell in huge numbers it was the No. 1 selling smartphone in Q4 2012. Yes the momentum in the market is for bigger smart phones. Samsung will reportedly launch their SiV in March and are manufacturing 100 million units. However I think that the next iPhone release that Apple will launch is a iPhone 5S with better specs, new iOS 7, a better camera, fingerprint reader (based on their acquisition of Authentec) and possibly NFC in April 2013. This next-generation iPhone would constitute a really good package that would sell on a par with the Samsung SiV. Pundits need to remember that there are millions of people locked into iOS, apps and music that can't easily change to Android or another system. This lock in keeps them loyal – with new hardware they stop being frustrated. 

However I do think that Apple will launch a larger screened (up to 5 inches) iPhone by late in the year. I think it will be longer not wider but will contain an IGZO screen that are stunning, thinner and better on battery life. This would represent a very strong new iPhone 6. It could be thinner, higher resolution, with longer battery life and with continued improvements in iOS 7 would again represent or be on parity with the best hardware in the market.

I also think that the cutting edge latest iPhones will continue to be premium priced. I cannot see any logic in Apple starting to launch cheaper products made out of worse materials. The only substantive difference between Apple hardware and others is it's feel, durability and premium quality. A Google Nexus 4 or a Samsung SIII just feel cheap compared to an iPhone. That's not to say that Apple won't refresh the iPhone 3 or 4 with updated specs and possibly cheaper, easier to manufacture changes that would mean the price point can drop to suit Chinese and developing market consumers.

The big test of the Apple innovation engine is coming 

With Google Glass, various start ups pushing wearable technology and the continued copying of Apple ideas and design ethos – Apple face a stern test. The strength of Apple as a company is that they take ideas which are breaking through and design them brilliantly so that they stand the test of time, and are so far ahead of the market that they retain a price premium for years. That's what the iPhone and MacBook Air have done. 

Let's be clear Google Glass is still a concept – they cost $1500 for goodness sake – hardly a mass consumer price point. What Apple are working on, from what I hear are technologies that create new mass markets. Wearable technologies are undoubtedly the next big battle ground. Whether it is an iWatch or an arm based iPad or indeed glasses Apple need to deliver a product which is truly functional, useful, elegant and able to capture the imagination and wallet of the mass consumer market. My personal take is that Apple will launch an iWatch either towards the end of this year or in Q1 2014. I doubt it will be before then because they will need to overcome the significant manufacturing, durability and functionality issues that will come with wearing the hardware on the wrist so close to the skin.

But let me underline that Apple needs to do something big.

They are a secretive company, they don't show off early stage products like Google have done with Glass. Jonny Ive says that the iPhone took nearly a decade of pushing and development to get to launch. Apple don't have a decade but given they are still the only fully integrated hardware and software company in the world they have some time to get their next big innovation ready – but, as they know, the clock is ticking not just on them creating an innovation but underlining that they have finally moved into a post-Steve Jobs innovation engine. 

What's your view on Apple rumors, the iPhone 6, the iWatch and Apple's innovation capability – why not leave a commnent?