There is an infamous Samuel Beckett play called Waiting for Godot. In it, two characters are waiting for a man named Godot to appear. They sit and stand and converse with passersby who eventually mention that Godot is not coming that day. Yet, like clockwork, these two characters continue to sit and stand and talk and wait for Godot to arrive.
I think for banking, our Godot is innovation.
We’re talking about growth initiatives here, not the bastardized definition of innovation that many are slapping onto their mission statements to cosplay as forward-thinking institutions. How many banks have achieved true growth by simply discussing it with others? You can swap out who the other is – your board, executive team, regulators, fintechs and facilitators of certain fintech zoos – but the answer is still zero.
If the play teaches us anything, it’s that waiting for Godot simply will not work in the current environment. If you want to live to see the next act, you’re going to have to lace up your boots and find him yourself.
Many of you are in the midst of strategic planning sessions. Compressed margins, little flexibility, rising funds, recession fears, and an evasive customer base hasn’t put anyone at ease as we move into 2024, and we know what this signals to banks: Cost cutting.
The gap between essential and non-essential expenditure will widen. Larger institutions are already beginning to reduce their headcount – Wells Fargo, Bank of America, Citi – and Alex Johnson recently reported that he hasn’t seen a Q3 earnings report that didn’t mention cost cutting. Many banks, including our own members, will have their budgets reduced.
We know this. And if you’re being forced to cut costs, cut costs. But don’t cut your capabilities.
In this era of unrecognized market conditions there is also an influx of unrealized potential. The banks that are pushing forward in their expeditions into the payments realm, identity, automation, and customer centricity are the ones that will thrive in the next era of banking. These aren't monumental investments – there are companies out there that are mining new sources of value, deposits, and profit for pennies on the dollar when compared to others. The Postage was up and running within weeks and for less than a part-time teller – they recognized a 300% ROI within six months.
Remember that exploration can happen in all sorts of ways, and with differing amounts of capital. Walking barefoot still gets you farther than sitting down in brand new boots.
And rather, walking in anything gets you farther than shooting yourself in the foot.
Boards and executive teams have historically cut costs as a way to preserve the bank during unstable economic conditions. This playbook no longer applies. Banks that stifle their sources of new growth will find themselves in worsening positions in the coming years as customers flock to more accessible institutions with more relevant products and services.
By now, it should come to no surprise that Godot never does show up in the play. It’s a flat, unceremonious ending that leaves many wondering where things started to go wrong for the main characters, or if it was simply doomed from the start.
Banking is not doomed, but it is changing. Financial institutions everywhere are making decisions that will either leave them out on stage when the curtain falls or will secure them a spot in the next act.
Make sure you’re not waiting for Godot. Go find him.
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