Banks have the opportunity to be the trusted custodian in customers' lives.
Aman Narain:63% of the industry's value growth in the last decade was captured by non incumbents.
Alastair Campbell:The danger is that the banks will just drift into being the dumb balance sheet in
Aman Narain:the future of the industry. And what we need to move towards is a mode of convenience.
Alastair Campbell:Crucial thing is build for
Aman Narain:the financial lives of the customers that you actually have,
Alastair Campbell:not If you leave it to
Aman Narain:the long arc of time, stablecoins and CBDCs and other things will sort of take over, and you'll lose control, you know, of that because they're they're essentially being run by private companies right now.
Alastair Campbell:You spend more time focused on keeping customers on your platform, making the platform more efficient, pursuing bad profits than asking the question, question, what role can I play in this digital future of our customers embracing the technology that's coming? Or do I just outsource all of that? If you can empathize even before you've had them, you've you're on the path to being able to develop the services that are financial life partner services.
Aman Narain:Yeah. And I think that's beautifully said. Welcome back to A to Z Fintech. I'm Aman Narain coming to you from a relatively humid Singapore. Zubin's taking a break on this one.
Aman Narain:I've got the keys to the studio for an episode that has honestly been years in the making. Today is a full circle moment. My guest is someone who gave me my first break into digital banking years ago at Standard Chartered. He's an award winning FS executive, a man who knows how to take the terrifying complex banking strategies of this world and make them just beautifully simple. Alastair Campbell's here.
Aman Narain:He's the former strategy head of NatWest, a veteran of Maricon, I should say, the only consultancy that's given me more friends than PowerPoints. He's he's just written what I believe is a really provocative book called Healthy Money. Al, we've discussed the genesis of this book many times. Most recently, last summer at Soho House. It was inspired by your thirty five year friendship with Richard Kibble, your best man and Deloitte's banking strategy lead.
Aman Narain:Richard's sitting this one out. So it's just you and me. Welcome to the show.
Alastair Campbell:Aman, thank you. It's a pleasure to be here. We, as you say, you and I go back a long way, and you're on every page of this book. So I I really appreciate the chance to talk about it you.
Aman Narain:That's very kind. Let's start with the sort of core question for anybody who sort of picks up this book, that I have a copy here. What is Healthy Money? Is Healthy Money about how people should be living their lives and their relationship with money? Or is it healthy money about banks and how they should be building products for customers?
Alastair Campbell:Yeah. Thanks, Aman. It's a little bit of the former and a lot of the latter. So I felt, and we've talked in the past, there are thousands of books out there telling people how to run their financial lives a bit better. And there are quite a few books telling banks how to use digital transformation better, but really there really aren't that many books about how banks can use digital transformation to create services that help people run their financial lives better.
Alastair Campbell:That's what this book is primarily about. Obviously, it gets into how people will need to run their lives better, but it's really about the banking services that are missing and the technology that can make that difference.
Aman Narain:So we wouldn't be good bankers or former bankers if we didn't sort of go straight to the data. Your data shows that 63% of the industry's value growth in the last decade was captured by non incumbents. Why?
Alastair Campbell:Well, in some respects, that's because they have digital scale, global digital scale, but that's combined with real customer relevance. I I don't think the kind of direct competition that banks are getting from Stripe, Adyen, or the margin of the indirect competition they're getting from Amazon or Shopify or places like that, or the Apple Wallet that wouldn't be happening if customer needs for a healthy financial life were being really well served by the incumbents. It's that headroom of unmet needs that is meaning that most of the growth actually is going on outside of the incumbent sector.
Aman Narain:And when you talk about value, do you talk about, is it you measuring it in market cap and revenue growth?
Alastair Campbell:Yes, that's a market capitalization. That's a direct comparison to what happened, I think, in the TMT sector, where the telcos were and that's that analogy. They developed three gs, four gs, five gs, incredible technology, but actually the value growth went to the front end players, the Googles, the Facebooks, who
Aman Narain:were That's what you call, you know, I think, but you call that the dumb balance sheet, right? Telcos have always been worried about the dumb pipes.
Alastair Campbell:Right. And the danger is the same thing, that the banks will become a balance sheet that provides services to those front ends, but the value growth is already going on outside of those balance sheets. And just one more point, because often bankers, when they point out about the role of the balance sheet players, they point out how difficult it is to run a balance sheet and to manage risk. Well, it is difficult. It's really hard to run a three g, four g, or five g mobile phone network, a global network.
Alastair Campbell:That's a really complicated thing. Just because it's complicated doesn't mean that it will sustain the value growth that the other players may exploit from it.
Aman Narain:And, you know, I also seem to remember, you said 40% of UK customers, I'm one of them, now hold an account with a digital bank. Is that just because the apps are prettier or do you, you know, quote Steve Jobs from way back when it just works?
Alastair Campbell:Yeah. Well, think it's actually that they're not, you know, in the past, people worried that people were gonna leave their incumbent bank and move to a digital only bank. That's not
Aman Narain:what we observe happening. What customers are doing is they're adding a digital bank into their lives. They've got an account with NatWest and they're adding Starling or a Revolut, and they're adding it because specific parts of their financial life are not well covered by the incumbent. It's often a kid's account, or it's foreign currency management, or it's paying bills, or it's a
Alastair Campbell:business account. There's specific things that mean that people are now being multi banked. And it's a statement that the incumbents aren't providing them with all
Aman Narain:the needs all they need. And having worked, you know, I think you and I have worked with incumbents as well as neo banks and the common, and most recently having worked with the incumbent, I found that the common response was, you know, one of sort of, yeah, but they don't really have, you know, your main relationship is with us. The money and the assets are with us. You just use them as a transactional bank. This is a bit of a, I guess, a question sort of framed as a statement.
Aman Narain:But it's the challenge around that is that, you know, some of these banks you're in The UK. Some of these banks, like the Monzo's, etcetera, have been around for over ten years. So at some stage, do you see that they sort of and the product suite is growing. At some stage, the customer sort of starts to trust the bank, and it's not going away. It's not a fly by night.
Aman Narain:It's been regulated for ten years.
Alastair Campbell:Well, yeah. So two points on that. The first point I'd make is on your 40% number. Remember, it's 40%, and it was 40% when I was writing in 2024. It was less than twenty percent five years before that.
Alastair Campbell:And it's been growing to the point where I think probably now maybe more than half of customers already have a digital only account as well in The UK. And I'm told like 85% of people in Ireland do. And he saw that. So there's a massive mushrooming. Then I think to your point, Aman, which is, you know, a revolution happens slowly and then quickly.
Alastair Campbell:This has been a slow transition as customers get comfortable using these other accounts for parts of their life. And, but okay, then I might just drop my payroll in for a couple of months because I need a big money spend.
Aman Narain:And then why would I move
Alastair Campbell:it back again? And, know, customers won't switch away. They'll drift away from the incumbents. The other problem of course, is that once I've become multi banked as a customer, I've laid myself incredibly open to another player coming in like a digital wallet, heaven knows like Apple Wallet reaggregating it the next level up. And then, you know, the challenge you have as an incumbent bank with your little mobile app in the App Store, why would a customer ever go past the Apple Wallet and open your app when they can get all the services, including yours, in the Apple Wallet?
Aman Narain:Yeah. I want to come back to embedded banking. It's very close to my heart, having done that at Google and then at HSBC. I think just to if we change tracks a little bit, you know, we wouldn't it wouldn't be book a by a strategist if it didn't have a framework in it. You talk about these three wheels of transformation, customers, architecture, and leadership.
Aman Narain:So couple of questions. Why these three? Surely, there were other candidates. What about things like regulation or capital?
Alastair Campbell:Yeah. Yeah. Well, on the other ones, I think things like regulation, particularly in The UK, we have consumer duty as movement now. Ironically, regulators, in some respects have the same dilemma as banks have. They have prudential regulation on the one hand, but they have conduct regulation on
Aman Narain:the other hand, and they have
Alastair Campbell:competition regulation. And all three of them are trying to march forward. In a sense, the customer and architectural challenges are reflective in regulation. But the reason why I picked these three and the reasons we've discussed before is they're mutually reinforcing within they are all levers that the bank has themselves. What do we offer customers?
Alastair Campbell:How do we architect? And how do we lead? They're nothing to do with outsiders like regulators or competitors. They are ourselves. And the challenge for us is if you try to change any one of them, taking the other two as given, you miss the opportunity.
Alastair Campbell:And within banks that often is happening at the same time. There are people in the businesses who are trying to offer new things to customers, taking the architecture from the IT function as a given. And there's people in the tech function who are trying to migrate to a real time core or something, taking the customer propositions of the retail business as a given. And when they do that, they both lose. It's only when you say, actually, we could serve our customers massively better in terms of their financial lives if we had a different architecture, and then we need a different leadership model to drive those.
Alastair Campbell:So it's three mutually reinforcing changes.
Aman Narain:Okay. You know, when just doubling down on on leadership for a second, the primer to that is motivation now. I do you think that leadership in banks is often addicted? And I use the word they're very deliberately, not because they want to, but they're addicted to unhealthy money, if you like, overdraft fees, lazy balances. You know, it's almost like that's a blueprint for actually, you know, for short term P and L.
Alastair Campbell:I definitely think that's true, Aman. And I think, obviously, it's a back book oriented mentality, isn't it? The book that I have and how I make money out of the book that I have is my primary source of income. And that in turn means it's an inertia view of customers. Customers have inertia.
Alastair Campbell:Moving bank accounts is difficult. Changing my financial relationships is difficult. Ensuring that I get more money out of the customers that I have, that's the best way to make money. As opposed Do to
Aman Narain:the related you think to the velocity of movement of management teams? You know, I was talking to, you know, I'll keep him anonymous, a senior McKinsey director, and he said that he was talking about sort of the correlation between CEO tenure and Right? I mean, you look at Jamie Dimon today at JPMorgan and their outsized returns. Here in Asia, we've had Biyush Gupta just retire a year ago with an incredible record. These folks have been around for, you know, decades.
Aman Narain:Tech has had that. Tech has had Tim Cook. We're talking about Tim Cook retiring. We're talking about his retirement in years, right? Like, whereas banks sort of have a revolving door of leadership and then the layers below them.
Aman Narain:Do you think how big of a factor is that in this?
Alastair Campbell:Yeah. I mean, I think that's huge. I think that, combined with our not a very tech oriented attitude of senior general managers. So to your point, the examples you give are the Tinder spot that light up the reality. Those are two individuals.
Alastair Campbell:He's a great example of somebody who was very architecturally driven, and he was working at architectural change cycles. He had, you know, a team around him who understood that they were transforming the architecture, not just the technical architecture, the logical architecture of the bank. And that that was going to drive the headroom for customer improvement. And you're right, that doesn't happen in a week or a month or a two and a half year tenure, but it's a legacy that you leave. Of course, you can take a ten year legacy mindset about a two year journey.
Alastair Campbell:If you articulate your journey as I'm going to leave behind an architecture better than the one I found, and that's going to be how I'm going to create my own legacy. But you're right, failing that, you've to be around for ten years to see the perspective of saying we are constrained by an account and workflow generated architecture.
Aman Narain:You know, I was interviewing for a role a couple of years ago and I was counseled, you know, when I was talking to HSBC, but not HSBC, somebody else. And I was talking to them about saying that, you know, true transformation in my opinion takes six to ten years. And the headhunter stopped me and said, can you please break it down into two year chunks because you're not gonna get the job. I didn't get the job. There you go.
Aman Narain:I guess you've been quiet at least. Yeah. You know, you and I have a habit of being honest and getting into trouble for that. Al, you talk about archetypes. I think one of the really interesting parts of the book is the archetypes that you sort of flesh out in this.
Aman Narain:And one of them that I loved reading about was you argue that the nuclear family, the sort of model of banking is dead. Let's dive into the digital native as well. Sort of these people are getting digital pocket money at the age of 11. Could you just sort of paint us this?
Alastair Campbell:So obviously, you know, you and I have both worked at lots of banks where the segmentation scheme is basically a life stage segmentation scheme. Yeah. You find people by their life stage and they go through their life stage. Candidly, the people that did that imagine that the consumers are relatively like themselves. The people inside the banks earn quite a lot of money and they have quite a relatively stable lifestyle and relatively stable income.
Alastair Campbell:And that they assume everybody else is an edge case relative to that. One of the things and I think this is a conversation you and I had had over many years one of the things that I think was a starting point for this whole movement was when I was working at Singtel and I saw the unbanked and how it wasn't the banking sector that was really being progressive about the unbanked, it was the mobile phone companies that And when you looked at the unbanked, they didn't reproduce the banking products in an unbanked way. They produced products that were much more directly related to their lives. So one of the things the book tries to do is it says, let's not do life stage segmentation. Let's look at people who are not well served by the standard product banking set.
Alastair Campbell:And of course, as you say,
Aman Narain:there's really not nearly everybody. Yeah. I wanna I wanna just, you know, just validate something, you know, for anybody listening, having worked with you for, I don't know, longer than two decades, you've been talking about this long before it became popular. Right? Where There was first the whole baby boomer idea of segmentation, came this sort of like dream of segment of one, and you and I have probably produced a lot of decks to justify a segment of one not believing in that.
Aman Narain:Truth is actually segment is not based on, you know, just purely demographic. It is also based on behavioral trends. I saw this in Google, you know, we were trying to segment launching Google Pay into shops, you know, like the B2B version in India. It's now at over 200,000,000 shops, so it kind of worked, the segmentation there. But the segmentation was not like, you know, turnover of X to Y and, you know, A to B or whatever.
Aman Narain:Right? The segmentation was something, it went on the lines
Alastair Campbell:of
Aman Narain:like, without door and air conditioner. Shop with door, no air conditioner. Shop with door and air conditioner. Then upwards. Right?
Aman Narain:So that was a you know, that that was more telling of the behavioral elements of that. And that led to by the way, that led to Google Pay didn't invent this, another one invented it. So, you know, if you are at a corner store, the biggest problem you had is that you couldn't validate the payment with your greasy hands. You were making if you were making, you know, ponds, which is sort of beetle nut thing on the side, you can't, like, make a pan, use your phone. Your phone's like your Ferrari.
Aman Narain:So somebody, Paytm, actually created a voice box. So it just said, you know, 2 rupees credited to your account. You didn't have to actually check your phone. You just got that. Yeah.
Aman Narain:That was a result of that segmentation. A bank would have never done that. Were like, oh, turnover of under 4,000 rupees needs to have a solution like that.
Alastair Campbell:And and that's a really good example because I think what it what it does is it says, actually the best innovation comes not from trying to do better for the average and the norm. Look at the weak signals from the people who are struggling with your product and your service and innovate for them because they will actually be the best way to innovate back for the core. I think that's what some of the archetypes do. Diving into a couple of them as an example, to your point. The Modern Family Point was a point that said, you know, right now banks operate as if people leave school, get one job, get one house, marry once, have one set of kids, work through their career, retire and die.
Alastair Campbell:That that all you know, everything works very
Aman Narain:You you've almost done all of those things except for the last well, not the die part. Mean, the retire.
Alastair Campbell:But we've seen exceptional, unfortunately. But the, you know, but the reality is that in The UK now, the average person has not two jobs per career as they did in '97, they have 12. Yeah. Over half
Aman Narain:Sometimes at the same time. Yeah.
Alastair Campbell:Yeah. Exactly. Yeah. Yeah. It's still better than pay.
Alastair Campbell:But but but that's another good point, which is over 40% of people in The UK have a paid side hustle
Aman Narain:in addition to their full time employment.
Alastair Campbell:Yep. Over half of the children in The UK are living in a household that doesn't include both parents. The modern family is a blended family of multi marriages, of complex financial relationships, whatever. And then we say, okay, we have a single account or a married person's account. Those are your options.
Alastair Campbell:Well, none of them apply to any of those people, to any of the people who are also gig workers on the side, have modern precarious incomes. So I think actually start with the modern family, look at how they are so networked in a complex, evolving network life and ask how you would support people in that life having their financial arrangements. Then I think just one more point. Can I just jump to neighbor's point there? Which was at the moment, the average person, average kid certainly in The UK, and I think this is true in lots of countries, it's their first mobile phone at the age of 10.
Alastair Campbell:70% of them want their pocket money digitally. Legally, they can't have a full bank account till they're 18. Mean, so we've got this insane gap between they want digital Can't you have a
Aman Narain:credit you could have a card at 16 in some places. Yeah. Yeah. Yeah. Yeah.
Alastair Campbell:So you can have you can you can
Aman Narain:borrow But Revolut's done that. Right?
Alastair Campbell:Revolut's that's what everybody's doing is they're is they're literally but but but people like Revolut designed their system to have parent child relationships as core part. Use that here in Singapore. Nearly any incumbent is a workaround against the core banking platform that only has accounts that are either single or dual, as opposed to everybody has financial relationships. Somebody invented customer, you know, data graphs twenty years ago, but banks are not using those data graphs to actually describe people's real financial lives. Shock news, People therefore having to go to Revolut and Starling and places like that if they want to vanish their family.
Aman Narain:And you know, to your point in healthy money, so lots of things to bounce off there. To your point in healthy money, you know, I've got a twelve year old and a 10 year old. And, you know, I was talking to somebody who has a 16 year old. They would talk about how they had sort of not got very healthy money behaviors, partly because they don't have the tools. Right?
Aman Narain:I want to give my kids I want to give my kids their pocket money in their bank account. I want them to feel the sort of like, you know, track that trust my kids to do the right thing. The sooner they have the ability to do that, the better. You know, growing up in India, there's a group of people called Gujaratis. My brother-in-law is one of them.
Aman Narain:They start, you know, informally teaching their kids on how to trade equities. By the time you I have a bunch of friends of mine who started learning how to trade equities at 12. And not day trade, but take a position, hold the position. Those kinds of behaviors create long term healthy relationships long before you go to college and you're sort of spending all your beer money and taking out overdrafts. Right?
Alastair Campbell:Yeah, yeah. And definitely true. You know, one of
Aman Narain:the points that we've made, you and I have talked about for a
Alastair Campbell:long time, it's reflected in the book, is this point of saying banking is boring and banks think banking is boring. And banks act like customers think banking is boring and banking is boring. Right? But my money is not boring. My money and my financial health are incredibly emotional character.
Alastair Campbell:After my physical health, my financial health will cause me the most extreme emotions I have in my life. It will cause, you know, mental breakdown, divorce, all kinds of sources of stress. It's an incredibly emotional and engaging category, but it's my money that's engaging, not your bank. And I think if you can't mirror my financial life in the way that you architect your services, it's not surprising that I think you're boring and you think you're boring.
Aman Narain:So let's go into that. Like how do you suggest that banks go about that? You know, like I have been doing this for, you know, a hundred years in one way. How do I, you know, pirouette to this new world that you're talking Yeah.
Alastair Campbell:Think back to where we started, I think there's three transitions: a customer and architecture and a leadership transition. Let me start with the architectural part first, just to make a good The look at the first is, I think, and these are things that I think the industry is trying to do at different paces in different ways. The first is that the historic core was dominated by the concept of accounts. An account is something where it tells me what a customer owes the bank or what the bank owes the But it's very poor at then articulate and the treasury function needs to know exactly that, In order to be prudential. But it's very poor defining my relationship as a customer with anybody other than the bank.
Alastair Campbell:It can't describe my family relationship. It can't describe my work relationships. And so what we need to do is we need to break apart the system of record, the part of the bank that records who owes the bank money and who the bank owes money to from two things, the products and the customer management. And on the products, you know, there are already technologies well advanced on loosely coupled product design. So you create products that are, that are modular in design and reproducible and, you know, smart contracts is one term of art for that.
Alastair Campbell:And there's different ways of doing that. But I think therefore all products ultimately should be fungible in hybrid. Why I need a credit card rather than a fungible credit line? Why aren't all ultimately all mortgages, some form of offset mortgage? Why aren't all savings, some form of FIFO savings?
Alastair Campbell:Why is it the case that the balance sheet implications of the product are so dominant to the customer that the customer is constrained with a distinction between a current account and a savings account and a mortgage and a credit card and all these different distinctions the products aren't designed at that fundamental level. But once that's happened, ironically, I think what would happen is there'll be many more products. The customers would probably actually see fewer products. They would just see more fungibility in their product, but products will become less important. And what would really matter is the customer.
Alastair Campbell:And I think that there are three customer graphs that don't exist today that really need to exist. Credentials and verifications. Yeah. So one thing a bank does incredibly expensively is it verifies who I am, and it verifies my creditworthiness. And when we look at the unbanked, the reason why the majority of people on earth were unbanked for many years was because the cost of doing those verifications was just prohibitive.
Alastair Campbell:The bank does that and then throws it away. That's an incredibly valuable piece of information for the customer and themselves. It's their digital footprint, their digital passport, their digital finance. So that's the first thing, verification. The second thing is my relationships, my financial relationships.
Alastair Campbell:Could I describe a graph that says I'm the parent of these children, I'm the spouse of this person, I have these gig relationships, I have these side hustle relationships, I have these supplier and customer relationships. And therefore I can control those relationships. You and I can go to the pub, we can pull $20 and we can spend it out of a pooled plot.
Aman Narain:Like a pool. Yeah. Yeah. A whip. Yeah.
Alastair Campbell:But all of those I sort of could do a whip rung at work. I can go on a stag do with a group of mates. All of that is normal. That's how people normally run their lives. Financial interactions are interactions.
Alastair Campbell:And the fact we can't do that is nuts. And then the third one is my financial habits. I need a graph of my financial habits. I need to be able to understand my financial habits and the bank needs to be able to intervene and help me become more disciplined, self actualising and self discovering about how I can run my financial life in a more disciplined and resilient way. But those three graphs strike me as the future of
Aman Narain:there's credentials, there's relationships, and there are habits. Got it. And where there's lots of questions on the back of that. I want to point out something and then jump to the question. One of the things that I've been obsessed about is the fact that the entire construct of a consumer bank is sort of 50 years old or thereabouts, right?
Aman Narain:It goes back to John Reed from Citigroup sort of articulating it. There's a beautiful note called Memo from the Beach, which he wrote, which is, I don't know if I've shared that with you. It's incredible. It's a clairvoyant view of data and finances from fifty years ago. And he talked, the concept of an individual has changed.
Aman Narain:You talked about it, work has changed because you no longer have one,
Alastair Campbell:you know,
Aman Narain:if you work at a bank, yeah, you have one employer because legally you can't work anywhere else, etcetera. Going back to your point on bankers being really bad at designing products because they're an exception. But also as an individual, as you talked about, you've always had relationships. Banks have not really understood those relationships. I lost my dad last month and my mom, you know, has going through two sorts of, you know, trauma.
Aman Narain:One is obviously dealing with loss of my dad, but the other is the bloody burden of financial jittery cocreator, sort of like, oh my god, you're dying to Coming
Alastair Campbell:at you at a moment when you're least emotionally prepared to do all that nonsense.
Aman Narain:Yeah. It's unbelievable. It's unbelievable what we had to do. Another podcast. But my point around this is that how do we construct, like, these individual relationships?
Aman Narain:And you'll these are so what's the do you have core banking? Do you do you how do you see this in the the tech stack of this Right.
Alastair Campbell:Working out.
Aman Narain:Banking becomes smaller? Does do we sort of what is what happens to the middle part of this? And then, you know, the front end's changing because as you and I talked about that you may not own the user experience. The user may be owned by Google, but the the sort of end to end experience is owned by you.
Alastair Campbell:Yeah. So I do agree with you. I think it is modular, but it's also it's led, to your point. There's a system of record at the bottom. Historically, the core banking platform has been doing far too many things in a bank.
Alastair Campbell:Agreed. So what it needs to be is a system of record and that the GLs run off the system of record. And what we mean by system of record is very specifically, who owes the bank what and what the bank owes to whom are all points of time, rigid, clear, and that's the thing. Above that, I think there's a product engine. There is a thing that generates products and it has modular components, the interest rate calculators, hybrid product designs, whatever.
Alastair Campbell:It reuses the scripts across. And then if you want to adapt to, you know, a repayment scheme or if you want to do an offset mortgage, if you want to do a, say a FIFO savings product, anything that you want to do is just a reusing of these components decoupled from the system record below. Then I think above it, I think you're right. I think there are then these three graphs and they're all powered by a common event streaming and event history. Yes.
Alastair Campbell:What's the history of my data proofs that creates my credentials? What's the history of my setting up of relationships that creates my relationship graph? And what's the history of my behaviours that creates my habit graph? Those three tools. And then above it is all the experience layers, as you say, the touch points.
Alastair Campbell:I believe that incumbent banks have the opportunity to be the trusted custodian of that piece in customers' lives. I think that's the thing that, you know, trust relationship between banks and their customers is less just about the prudential piece. It is about this potential to be the trusted custodian of my credentials, my relationships, and my networks. And I only really want to do that. I only want I don't want to have that in 10 different places.
Alastair Campbell:I can have 10 different experiences driving off of that. But this is actually and so in the past, banks thought that they had a sticky relationship with their customers because it was inertia. Frankly, it was a pain in the ass to move banks. In the future, maybe a sticky relationship with my customer data that actually could, but it's a very specific concept of customer data, not, you know, my marketing preferences. Yeah.
Alastair Campbell:So I call it a
Aman Narain:mode of convenience. So what banks have what banks have trapped you in is a mode of inconvenience. And and, you know, and what we need to move towards is a mode of convenience saying that actually it is you know, I keep going back to Netflix because actually it has all my preferences and all of that stuff. Or a better example, Amazon Prime. I know it's more expensive, but I get that predictability.
Aman Narain:I get that, you know, that regular service. And there's
Alastair Campbell:the irony, right? Banks have claimed to be customer centric. They've been trying centric for twenty years. But what they thought customer centric meant was making it easier to interact with, as opposed to becoming a trusted custodian of the customer's financial life. It's quite
Aman Narain:an Is easy this a giant misunderstanding? Because what you talk about we talked about the top is the experience layer and the bottom is all this customer data. And the way they're trying to keep the customer inside this jar is saying, I've got all your data and you've gotta use this app and you can't get out of here. Yeah. And and the customer's like, actually, I can.
Aman Narain:I'm just gonna smash the glass and I'm gonna be free. And I'm like, gone. But what you should be doing is what will keep me with you is if you have all my habits. And it's really hard to recreate a habit graph Yeah. Somewhere else.
Alastair Campbell:And also, actually, the fact that you're a regulated conduct regulated institution means that I'm actually that's a massive positive because I'm not gonna hand my habits over to some random stranger who I don't know what the hell I'm gonna do with And ironically, this is the competitive moat of the trusted regulated institution in streaming into removing bad conduct. Turn it into a huge virtue. We're the only people you can trust.
Aman Narain:I mean, sticking sticking with The UK because you you're based there. Do you think that that's what is happening with, you know, the digital banks? Sort of like giving you a little bit more day to day tail. I'll give you an example. Monzo gives me my year end spend.
Aman Narain:It's kind of like my Spotify playlist in summarized. It's just that the fact that my bank can do that is kind of encouraging. It's still still far from where I'd love it to be. Yeah. But do you think this is the advantage that digital banks have over incumbent banks?
Alastair Campbell:But but only because to your point, architecture at digital banks is a top table conversation. I don't think most incumbent banks, I don't think the CEOs and management teams of most incumbent banks view the architecture of their bank as the top, an issue that the CEO cannot delegate. They are, it's a bit complicated. Let's leave it to the IT department. We'll just tell them what we want.
Alastair Campbell:And it's not you're missing it. Right? What you're trying to do is get better at account management. That game is the past. The question is, how could you architect into being a customer data custodian?
Alastair Campbell:And that's not even a question you're asking, let alone an answer.
Aman Narain:It's interesting you should say that because no CIO or CTO from a bank has become the CEO. Interestingly, Mark Dargan, who I don't know if he was there when we worked at Standard Chartered at the same time. He was the CTO or CIO at UBS. He's just been hired not by UBS to be their CEO, but by N26. So he's going I don't know many examples of CTOs who've gone on to become CEOs Yeah.
Aman Narain:Development, you know.
Alastair Campbell:But I think in the fintech world, as you say, that's not uncommon.
Aman Narain:Yeah. We we Zubin and I talk a lot about this in our pod. We talk about an engineering mindset. And that's the point. It's a combination of what we just talked about.
Aman Narain:It's about having long term vision. It's about sort of not being enamored by the glossy app layer, but actually going deeper and understanding how software is built. It's what you talked about a complimentary of people like Piyush, etcetera, who went a few levels deeper than your classic CEO.
Alastair Campbell:And one point I'm gonna make is it's not actually technical in an engineering sense. I think it's more logical than technical. I'm gonna give an example. Know, when I worked at Singtel, my boss was the CEO and she actually had been the first employee of Singtel when it had been privatized from having been a single service company in the mid nineties. And her point was when she joined Singtel, they didn't have customers.
Alastair Campbell:They had subscribers. So people subscribed. Was the mindset of the institution. People subscribed to the phone network and we run a phone network and then a phone was called on premises equipment. Was the extension of the network into your house.
Alastair Campbell:And so it was a technical thing apart. Right now, obviously, in order to phone somebody, what you needed to do, you needed to know their phone number. You needed to know their account in the network effectively. Yeah. Well, what happened sometime later on was Apple pointed out that people tend to phone people that they know.
Alastair Campbell:Why don't we create a thing called a contact list? And people can phone people from their contact list. And then other people came up with the idea of people tend to have relationships. Why don't we have networks and social networks? The idea of phoning the account on the network left that telco industry years ago, but not because the telcos did it, it's because others did it to them.
Alastair Campbell:Well, I think the same is happening in banking. Just because I want to pay you, I shouldn't need to know your account number and your sort code.
Aman Narain:This is a bit of difference sitting in Asia. You know, even know. I send money to all my friends, whether I'm in Singapore or in India, people in Thailand, you name, you know, the country are sending money based on mobile phone numbers because of national ID system, right? National rails exist. UPI in India, PayNowHere, DoItPay in Malaysia.
Aman Narain:Everybody's sending money to each other on mobile phones. But that's not because the banks decided to do it. It's because the regulators stepped in and pushed that, which brings me to my question. What is the role of a regulator in this sort of, you know, mix? You know, because clearly banks haven't done it.
Aman Narain:Regulators push it?
Alastair Campbell:And it's really hard, isn't it? Because do they try to push it from a sort of a conduct and customer agenda? Or do they try and push it from a liberalization and competitive agenda? The Apple Wallet is a great example of that challenge, right? Which is the Apple Wallet is developing its potential because of open banking regimes.
Alastair Campbell:So it was a competitive thing that's driving the potential for our customers to probably get, not yet, probably get a whole range of financial management tools from Apple that they should have got from the bank years ago. But if that happens, and then, as I say, the trusted custodianship that could otherwise have happened, regulators could have said the great thing about the banks that people in banks can break the law if they don't do KYC right, if they don't do credit assessments fairly, if they don't and that's a good thing. It's not just for the banks, but for the industry. It's a good thing that there are people who consumers can trust. So I'm hoping it's a conduct based transformation that actually they're pushed into taking this custodianship out of obligations on conduct, not about fear of competition.
Alastair Campbell:But I think
Aman Narain:every moment is the reverse. I'll share with you a maybe controversial view for European listeners here, possibly The US, but definitely European. The challenge with open banking has been is that it's too, it's a descriptive kind of approach to openness. What we've seen in Asia is a prescriptive measure. Prescriptive in like, this is how the phone number will be rendered.
Aman Narain:This is how you will, you know, these are the sort of the limits that will be allowed. That prescriptive approach has allowed for industry to sort of come together. Sort of like the USB C moment. Europe's been very good at pushing USB C onto Apple, but it hasn't really told its banks, you know, you're gonna have to do it this way. It's interesting.
Aman Narain:I don't know.
Alastair Campbell:And I definitely agree with that. And I think that's definitely is the criticism. To your point, you know, to two examples of the obvious, the reverse, isn't it? One is barcodes. What a what a genius that was to say the best way to make supply chains interoperable is by a series of black and white lines.
Alastair Campbell:You have standard meaning for everybody. And secondly, the internet, of course, the TCP IP protocols and, you know, we're not going to try and wire the world together. We're just going to create a standard language for packets of data and the world will wire itself. That was a genius to unlock innovation. You're right.
Alastair Campbell:Interoperability standards is a much more effective way of unleashing competition.
Aman Narain:And interestingly, banks kind of push back on that, but it's actually in their advantage because if you leave it to the long arc of time, what will happen in the West, quote unquote, is that stablecoins and CBDCs and other things will sort of take over and you'll lose control of that because they're essentially being run by private companies right now.
Alastair Campbell:And maybe this comes back to the point you made a while ago about tenure, leadership tenure, which is if the dominant part of your tenure is spent preserving what you have rather than creating what's possible, you spend more time focused on keeping customers on your platform, making the platform more efficient, as you say, pursuing bad profits than asking the question, what role can I play in this digital future of our customers embracing the technology that's coming? Or do I just outsource all of that and just drift into being the dumb balance sheet in the future of the industry?
Aman Narain:Yeah. And it's I don't think this is they're deliberately doing this, they're sort of slowly driving down this cul de sac, particularly in Europe, but, you know, around the world as well, ex Asia, I'd say to a large extent.
Alastair Campbell:Yeah. And I would just want to say, you know, so we can go doom and gloom. I would also say that in every financial institution that I've ever had anything to do with, and I think you'd say the same, There are passionate people who are passionately in that industry to try and make the lives of their customers better. And the book is as much a blueprint for them as a how to guide of how to bring together customer architecture and leadership to make that as it is to be a doom and gloom merchant about saying, you know, you're irrelevant and the world is moving on without you.
Aman Narain:Who have you written this for? Have you written it for CEOs, CXOs, middle level managers? Yeah.
Alastair Campbell:Do think there are lots of people who are either healthy money champions or healthy money curious in most financial institutions. And I think for that, it's probably more for them partly to argue a how to guide as to how they would do that and what kind of conversations they need to have, but also hopefully to help them recruit a broader group of executives around them to saying, actually, why are we focused on customer inertia rather than customer engagement? Why can't we do other things? So it's a how to and a recruitment.
Aman Narain:And so, Alastair, I thought we could play a little game before we wrap this up. It's sort of like a healthy money bingo, if you'd like. Let me sort of explain the rules of the game to you. I'm just making this up on the fly, so let's see how we do with it. Your book is about three, not primitives, but three sort of core capabilities that you think people need to develop.
Aman Narain:Architecture, customers, and leadership, right? Are those sort of the levers you talk about? I'd love to understand what advice you have for the C suite at the top, the middle managers, and at the bottom, people who are starting out their careers. You've got you've got kids who are going to be in the workforce hopefully soon. Maybe they'll choose banking.
Aman Narain:Right. But what advice you have for them? So does that work for you?
Alastair Campbell:Okay. Okay. Well, I think overall, I think probably the advice to all those layers is to take a perspective on each of those three topics.
Aman Narain:Yeah. Yeah. So let's go with the CXOs. Let's start top of the house, take go through each of those three topics, and then go down the line. Yeah.
Aman Narain:Does that work
Alastair Campbell:for Okay. So at the top, the first thing I would say on architecture is it's it's vital that the CXO recognize the architecture is is something they can't delegate. So the layered reusability of the architecture is a thing that they need to focus on.
Aman Narain:So layered reusability. Customs.
Alastair Campbell:The layers and the reusable layers. The
Aman Narain:CXOs, the C suite for customers.
Alastair Campbell:Well, building for modern financial lives. That's the crucial thing
Aman Narain:is build for the financial lives. It's the customers that you actually have, not the customers you had twenty, thirty years. I love it. By the way, I've got to confess to you, pause for a second. Think about this whenever you'd I think about modern lives, think about Phil Dunphy from Modern Well, the
Alastair Campbell:architect the archetype Modern Family was one that I used with, with a board to describe
Aman Narain:If you ever if you ever make a movie out of this, you'll have to get him to play that role as a important family head.
Alastair Campbell:Absolutely.
Aman Narain:Just rounding out c c suite, let's talk about leadership. What's the message for leadership?
Alastair Campbell:Yeah. Okay. Well, well, the crucial thing there is is customer engineering. It is engineering with the customer in mind. Both words are important, right?
Alastair Campbell:It's engineering. That's C suite has got to recognize that engineering is not something it delegates, but customer engineering is the way to cut through, reusing the existing capabilities.
Aman Narain:Beautiful. And that's what, you know, I think Revolut and Monzo and all brought to the
Alastair Campbell:I really focus on that kind of stuff. Yeah.
Aman Narain:So moving down to the middle management.
Alastair Campbell:Yeah.
Aman Narain:What's the what do they need to think about when they think about architecture?
Alastair Campbell:So so architecture, to borrow a phrase, I think, from Google, steal with pride. I is about reusability, and reusability has two components. Me building stuff that you can reuse, but frankly, the more important stuff is me being willing to reuse your stuff rather than build my own. So steal with pride, make a virtue out of reuse.
Aman Narain:I don't know if you remember this. At Standard Chartered, when we worked together, we had a program called Dashhotesh, but we paid people to copy each other's ideas. We had an award where if you came up with the idea, you got three points, but if you copied somebody's idea, you got one point or two points. And it was an incredible program. And I remember we said plagiarism is okay in this case.
Alastair Campbell:And I think that's absolutely right, isn't it? That steal with pride is quite a powerful virtue, think.
Aman Narain:What about customers, middle managers and customers? What do they need? What's the
Alastair Campbell:Well, it's about customer relevance and customer intimacy. It's about the jobs to be done. Can I focus on the unmet needs of customers' financial lives and focus on the jobs that they need to be done?
Aman Narain:Got it. And finally, rounding that out for middle managers, leadership, they what need to think about?
Alastair Campbell:Well, leadership there is about reproducing the technology mindset of giving customers more for less, ensure that every year I'm gonna release a better version, you know, version 16 or version 17. Constantly getting more for less, more for less, more for less every year.
Aman Narain:Yeah. Got it. And now to the sort of the of the newbies, people who are joining, graduates or or young professionals, what do they need to think about in terms of architecture?
Alastair Campbell:Well, I mean, obviously their ability to dictate the enterprise architecture is a bit limited day one, but one thing I think they could focus on is the two in the box mindset, which is customer oriented people and technology oriented people coming together to solve problems together. So if you're in, if your first job is in one of the front end retail organizations, find some technology people to work with. If your job is in technology and the coding engineering part, find some custom people to work with and bring together two in a box as many times as you can early in your career.
Aman Narain:Wow. That's the first time I've heard that. Where's that from? Is that an Alastair Campbell special?
Alastair Campbell:Well, I'd love to say so, but no, I I I heard it from DBS and a lot of the challenges they generated there. So I'm and I hope that they made it up. Otherwise, they may have they may with pride.
Aman Narain:So, yeah. If you're a young professional, two in a box could be a have multiple meetings. Okay. But, you know, let's talk about speaking of customers. Let's talk about customers.
Aman Narain:What do new employees need? Yeah. Yeah.
Alastair Campbell:So we talked to middle management about jobs to be done. I think at a more basic level, the first challenge is empathy. It's actually being able to say, as a newbie, can I start with customer empathy? And the point is when we started our careers, we hadn't had many of the life experiences that really caused financial stress. We hadn't had divorces or health shocks or loved ones with health shocks or losses of income and employment, things like that.
Alastair Campbell:Those are the moments when people's horizons massively narrow. In those moments, if you can empathise even before you've had them, you're on the path to being able to develop services that are Financial Life Partner services.
Aman Narain:Yeah. And I think that's beautifully said. It's healthy, not just for the individual and the relationship, but it's also healthy for the financial organization. And then to finish this off, what's your leadership advice to young professionals in banking?
Alastair Campbell:Own your career. As we said earlier, that you will have lots of different employers through your career. You will have lots of different paths. Those nonlinear career paths are an inevitability that you should choose to embrace and love and take advantage of rather than try to mirror people further up your own organization and view it.
Aman Narain:So what you're saying is don't just look at the CEO or the chairman and draw inspiration.
Alastair Campbell:Yeah. Yeah. Well, I think that's it. And chart your path rather than theirs.
Aman Narain:Super. Thank you, Alastair. Thanks for this.
Alastair Campbell:Thank you very much.