What’s troubling our banks? It’s not a lack of creativity, it’s Stockholm Syndrome

  • Why are these experiences being delivered by the startups above, and not by established banks?
  • Why do “outsiders” continue to develop new approaches when insiders have data and relationship advantages with their customers?

A Brief (!) Overview of Stockholm Syndrome

The Impact and the Answer

  • SoFi (among others) reinvents the lending market while traditional lenders cling to FICO scores and traditional origination channels.
  • Mint (among others) brings data aggregation and PFM to the masses while traditional banks figure out how to cobble together a consolidated, internal view across multiple systems.
  • Credit Karma (among others) empowers customers to own their credit history while traditional institutions continue to charge a fee to access the very same data.
  • Ambidextrous organization design — This approach describes a team that is separated (physically, culturally, and structurally) from the traditional teams within the organization. This gives the new team freedom from delivering everyday goals that might cloud their ability to dream up new realities.
  • Organizational Detox — Similar to the above, leaders need to allow existing members of the org who work on these new projects to wash away the residue of the constraints they faced in their jobs. It’s easy to ask for an open mind, but our actions need to back up our words.
  • Delaying the marriage of experience and business case — too often, a new experience is created internally only to be shot down because it is too expensive, or has no hope of customer acquisition, or only works for a part of the customer base, etc. We need to defer judgment long enough for the experience to be tested. As disruptive as these changes are to our customers, they may be even more disruptive to our organizations.





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Abhi Agrawal

Abhi Agrawal

Product Management, pizza, and podcasts.

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