Predictions 2022: No Predictions This Year
I’m not writing a prediction this year.
I’m no stranger to the predictions cycle that gears up this time of year. For 20 years (paywall) I wrote predictions about fintech and banking technologies and strategies. Like my colleagues, past and present, I’ve had my share of “I was right!” and “I was way off!” moments during all those years of writing predictions. My Thansyn and other colleagues in the technology & fintech universe. are now publishing their predictions for the future of various technologies, banking and fintech. I, on the other hand, have been refrained from writing up a single prediction.
I haven’t stopped thinking about the future of financial services to be sure. But I’ve burned out on predictions.
The last 2 years shattered my belief in predictions. Sure, I’ve always known that humans, life and the business environment are all unpredictable. And at least right now, humans, business and life are all at the mercy of viral flare ups, mutations and scientific innovations.
For many if not most of us, the pandemic made life more unpredictable. But the pandemic didn’t change my thinking about predictions.
The pandemic disrupted the way I’ve approached my life and work.
This disruption was a big change for me. I am by nature and profession a strategic thinker. This means I like to plan & not just for work, for my clients. I love to think & write about how FIs can or should use fintech & other technology in various scenarios to better service & support their customers & make more money. I even started a newsletter and post here for this purpose.
In my personal life, I use that strategic skill to create a well-planned & completely scheduled, predictable routine that changed by seasons. For example, my daughter’s gymnastics practice and meet schedules dictated that during the school year, I drove 3 times a week to pick up my daughter from school and take her to practice and figured out how to do my work & to complete errands in that schedule. Once a month, I spent the day driving us to a meet at a far-flung gym, watching the meet, talking with other parents and hoping she got good scores on her routines.
All of that evaporated in March 2020. Suddenly, all plans and planning were off, worthless. My strategies that worked for years no longer worked. The daily schedule was suddenly gone. I changed the way I did small things that I had done automatically – like grocery shopping – before. Though it was months off in early 2020, I had already started planning a trip to the National gymnastics meet in southern California and a vacation afterwards. As we pushed through winter, my kids and I were already talking about the places we wanted to visit. Even before the head coach sent the email, I knew the meet was canceled.
Of course, the pandemic didn’t change for just me and my strategic planner brain. Life changed for everyone. I’m not complaining that the pandemic and lockdown affected me any differently or harder than anyone else. If anything, I was grateful that my kids were teenagers and not all that interested in spending time with me, pandemic or not.
I’m not alone in experiencing disruptive change. The end to strategic thinking about one’s own work life has led to what many call The Great Resignation. Among the reasons for 4 million Americans resigning their jobs in July 2021, Ian Cook wrote in the Harvard Business Review:
In general, we found that resignation rates were higher among employees who worked in fields that had experienced extreme increases in demand due to the pandemic, likely leading to increased workloads and burnout.
In short: More and more people are finding that they can no longer live life the same way they had in all the years before. Their work & life strategy changed.
Like so many others, I changed, too. I stopped planning. I stopped counting the hours my daughter spent on FaceTime — it was the only way she could spend time with her friends. I no longer focused on family dinners. We were together all the time; we no longer needed to make that time.
Instead, I focused on being with them in the moment. I made myself available to my kids for more in-the-hall conversations or, yes, group text chats. I bought more board games so that we had new opportunities to engage with each other. I forgot about future vacations.
I am thinking differently about strategic analysis too.
While I am starting to plan a bit more now, I am burned out on making any predictions personal or professional. I don’t know if these tentative plans will happen. Will countries close their borders again? For how long? Will the Nationals gymnastics meet be held this June? I don’t know. I can’t even bring myself to predict if they will or not.
I believe that financial institutions must also change how they think about strategy. FIs have long been focused on creating and executing a well-planned long-term strategy. And, yes, I have advised many such FIs about these strategies. Strategies that were long on plans but short on near-term change & innovation. In the last 2 years, the FI’s ability to adapt & act decisively in the moment has become critical. Not only for the FI, but for customers. Jill Castilla and Citizens Bank in Edmond, Oklahoma are a great example of this ability. With Castilla as CEO, Citizens acted in the pandemic moment – whether it was a new way to provide branch services (curbside!) or to create PPP loan applications and to simplify PPP loan forgiveness for business customers to apply for these loans. I wrote about other examples, especially from retail, in my newsletter.
If No Predictions, Then What?
Just because I’m not writing predictions does not mean that I’ve stopped thinking about the future and strategy and making recommendations for FIs, fintechs and investors. In fact, I am more focused on technology, business and consumer trends and how they can impact FI futures and strategies. For example, I wrote 4 issues of my newsletter on teenagers as a target niche market.
Change doesn’t mean that your FI does not need a strategy
I believe that the most important FI needs & trends – such as increasing profitability, identifying new markets, innovation – all rely on the FI’s ability to figure out what their innovative niche market products and services really are. That translates into a strategy that is grounded in an understanding of the real lives and contexts of the people and businesses the FI’s strategy will affect. It means an FI must understand those lives at a more granular and specific level than your traditional demographic or stereotypical understanding and methodologies support. It means your FI must be prepared to act today, tomorrow as well as in 3 years.
Understanding people and businesses in this way means uncovering hidden tribes. For example, it means addressing the specific needs of teenagers differently than you would adult customers. It might mean closing branches or thinking about DAOs and how they may start to impact FIs in a new way. (Yes, if Vogue Business is talking about DAOs, your FI ought to start thinking about them too.)
For banking vendors, it means providing the tools that enable this deep grounding and understanding of customers.
Instead of writing predictions, I’ll be thinking about questions such as:
- What are the tools FIs really need to identify hidden tribes?
- What digital banking platforms really support hidden tribes and the innovation required to service them?
- How can smaller financial institutions such as credit unions and community banks be better positioned to uncover & support hidden tribes?
- What are the traps of “just following” the hidden tribes other FIs uncover?
I think that the ability to uncover hidden tribes and the real customer needs associated with those tribes (or niches) will drive successful FI strategies, not vendors or legacy understandings of customers or demographics. Why?
Everyone’s life has changed.