Innovation – really?
Are you sure you are really creating innovation?
Are you not just re-inventing what has been done before? Just in a faster more efficient way?
With most things that we or others do, technology seems to be the answer but is it really the answer?
We are now seeing today the shift in marketing coming back around again to the old format of “word of mouth” or “referral” but in today’s world of technology and marketing speak – it’s now redefined as being labelled “relationship marketing” or “social selling”!!
Same method just a different hat/clothes….but whilst marketing may be coming full circle, it doesn’t mean that innovation is delivering what we really want!
Is it just really destruction in disguise?
Are we innovating just for the sake of it and wanting to make a name for ourselves or make lots of money out of it?
Take the world of banking for example….
In the past of pre 1960’s, all decisions were done at your branch and the bank manager knew you and your family. So, any lending etc was all based on you and your ability at his/her discretion – all down to the relationship that was there within the community based on you, your family and the company that you worked for.
Since technology (in it’s earliest formats) arrived in the 1960’s, automation has taken over more and more to make systems more efficient and streamlined but has this really worked?
In some aspects yes you could say it has but in others, the real answer is no as local knowledge and decision-making was removed, thus meaning as people were rejected for funding, the rise in third-party lending increased.
The rise of third-party lending meant people were forced in to higher debt as these lenders would charge more than a normal bank at huge levels meaning it could take a year or longer just to pay off an amount that if a High Street Bank had lent them the money, they would have only taking weeks or a few months to pay this back!
Then as technology developed and arrived more and more in to the banking and finance eco-system, since 2010 we have seen a boom in telephone and on-line lending. This means, the speeding up of the process of lending, by getting a decision within minutes and then the payment into your bank account within anywhere from a few minutes to a couple of hours!
So yes taking banking, technology can improve and make services more streamlined and efficient but at what cost?
With this technical revolution that the banks and third-party lenders are rolling out, another new wave is appearing with launch of Challenger Banks but this is not better…..far from it……
Yes, the speed of delivery, the time for results/approvals being delivered and transactions speeds improving, are all benefiting us in so many ways.
By streaming processing and implementing the technology, once the investment/delivery costs have been covered, the cost base is much lower meaning shareholders/investors are being rewarded with huge improved profits.
All well and good you may say but is this short-term win worth the long-term pain?
The Challenger Banks are operating from one or two locations where they have offices for the staff to operate from as well as looking after/developing their own technology – no physical branches or local staff for you to deal with.
Thus meaning, the overheads are so much lower due to a much lower operating base, and when added to offering virtually the same services, revenue stays around the same but when combined with lower overheads – the profits will be much higher!
So as traditional banks have to match and compete with the online/telephone companies and Challenger Banks, branches shut and staff numbers are reduced – creating the casualties of technology!
And this is where innovation becomes destruction over moving forward…..
Empty buildings that the banks vacate become empty for long periods of time and make the streets look empty/lonely places to be – creating a Ghost Town environment?
Before you say that new local businesses can take them over and move in, the issue is that the Pension Funds that own them and add to this, the costs of the Estate agents that manage them – the rents become too high for small local businesses to occupy them!!
And in turn meaning these remain empty……….
Add to this, the staff that are laid off, the number of people being unemployed will rise and rise, leading to more destruction of our society as how will they afford to live?
With Pension Funds not making the money to cover the pensions they have to pay out; and added to the fact that more people will be seeking benefits to replace the incomes they had before due to not being able to find a replacement job – this all leads to the destruction that our society will see as technology takes over more and more…….
The question is, are you prepared for this destruction that innovation is now creating…….
If you are wanting to understand more about FinTech, Social Relationships and how it all combines with what The Social Family offers, then feel free to contact myself via the form below:-