Insight Middle East and Africa is delighted to speak with Sonia Wedrychowicz, former Head of Technology Transformation Consumer and Community Bank at JPMorgan Chase and COO of digibank by DBS that was named by Euromoney the Best Digital Bank in the World.

Sonia, could tell us about yourself. What are you most passionate about? What inspired you to pursue career in financial services industry and what has helped you become so successful?

My first passion in life was travel – since I was about 12 years old I constantly dreamed of going to different places and learning about new cultures. That dream was impossible to fulfill at that time though, as I was living in a communist country and we were not allowed to travel. That situation has changed dramatically when I was 20 years old – in 1989 the Berlin Wall came down and the world has opened up for us Poles, as well as for the other people in the neighboring countries. Thirty years later I have been to over 78 countries all over the world so my dream actually came true big way! Over time I also discovered two other passions – my empathy and joy of working with people and … practising kickboxing.

From what you’ve seen globally, what do you consider as the most important challenges and opportunities in banking today and in the future? How do you envision the future of banking?

I believe the banks are currently the victims of their own success. The  growing markets, increase in GDP, people – their customers – becoming wealthier every day are making the banks believe that “life is good” and it will always be like that. Their success is becoming their biggest enemy – they don’t see the need to transform and change the way they approach business. Banks don’t feel that the new entrants to the market – mainly the big tech companies will soon eat a substantial part of the cake that belonged to them for the last 700 years. I am afraid that in the future banks worldwide might become like the banks in China  holding the life savings of the people and becoming a little like a piggy box, while the true “action” i.e. all the daily transactions, not just payments, are performed by WeChat and Alipay.

What do you consider to be the biggest gap between what consumers want and what banks deliver?

We once asked our customers during one of the focus groups whether they liked their social media platforms like Facebook or Instagram and they told us they loved it. When we asked them if they liked their banking mobile applications they told us they hated them … why? Well, the social media platforms -thanks to their simplicity, convenience and an emotional personal touch- made people feel they were just for them, both individually and personally. What people were lacking in the banking application was the difficulty to use them, over complicated user interfaces and the lack of personalization which can be described as “one size fits all”. And it does not!

How are neo-banks banks disrupting the industry?

Neo-banks are disrupting the industry in many different ways. Some of them are created by traditional banks in order to conquer a new market and test new technologies and new ways if doing things- a good example is digibank by a Singaporean bank called DBS that was launched in India and Indonesia and initially had showed a good traction. Another example are Marcus by Goldman Sachs and Finn by Chase in the USA that were designed to enter a different market segment in their home market – the millennials. The classical neobanks like Stirling, Bank26 or Movens are launched in order to take over the traditional banks customers in order to offer them banking services in a completely new way.  So each of them is disrupting the market is a different way depending on their vision and the mission they were set up to accomplish.

What challenges do FinTechs present to established banks? How do established banks respond to FinTech disruptors? How can banks and fintechs work together?

I believe the small fintech companies that have mastered a narrow but deep piece of customer experience are not a real threat to the banks as they are offering complementary solutions that usually get integrated into a bigger banking mobile applications. I believe, however, that a true threat is coming from the big tech companies like Apple, Google or Facebook that got us addicted to their platforms and made us spending lots of our time on them. Complementing our daily activities on those platforms with the financier transactions will come as a natural extension that will be largely transparent and invisible.

Do FinTech products appeal more to certain demographics, say millennials?

Everything that is bringing customers simplicity, speed and convenience will appeal to both the millenials and the older generation alike. Consumers these days are demanding the banking solutions to get delivered using technology that is making their experience seamless and frictionless. Therefore, all products – or rather solutions as I call them- that are allowing people to save time on doing banking and hence have more time to live and enjoy life will be the winners.

Are banks prepared for the digital revolution? What`s on top of their minds when it comes to keeping up with digital transformation?

I think that the awareness and the sense of urgency of digital revolution varies across the world. I have seen the highest awareness and the willingness to transform by the Asian banks as WeChat and Alipay success and expansion are basically in front of their faces. Europe is somewhere in- between with a very strong banking system which is getting disrupted by Payment System Directive 2 (PSD2) and the Open Banking initiative. I have seen the least awareness in the USA – especially among the biggest banks. As mentioned before, in the country of Facebook, Google, Apple, Microsoft and Tesla banks do not seem to see the threats of the digital revolution coming. In many ways the banks behaviour in that part of the world reminds me of the famous Kodak, Tesla or Nokia moment, but may be I am mistaken?

If banks are aware of a need to digitally transform, why, in your opinion are so many of them struggling to get going with business change?

I believe the biggest obstacle to true digital transformation is the lack of understanding of the banks’ senior management that it is not about technology, but it is all about people, the mindset and culture change. Very few, if any, banks understand that the culture and behaviour change needs to come from the top of the house and cascade down to each and every facet of their huge organisations. It is very difficult for the senior management teams to accept the fact that their roles need to change. In the digital world that is based on facts and data analytics the seniors don’t hold the licence to be always right anymore. Their role transforms to become the carriers of the open minded agile culture and the role models of the new behaviours. The replacement of the hierarchy and position driven culture into democratised way of taking decisions and introducing a true empowerment of the people at the lower levels, does not come easily to many. These, in my opinion, are the true obstacles to digital transformation and not the lack of investment money into technology which is often quoted as an excuse.

What do you believe are the most important elements when it comes to digital transformation?

The most important element of digital transformation is to win the hearts and minds of the people that are involved in it. It is natural that people are fearing the change. The role of the senior management is therefore to show people that the transformation is done for them and through them rather than “to them”. Only with the motivated, engaged and empowered people we have a chance to succeed with the digital transformation.

Which emerging technologies do you see as game-changers that will have the greatest impact on banking? Do you see banks using Blockchain over the next years?

I see a few emerging technologies becoming the game changers in the next few years. The first one is blockchain that will be used to issue not only stable coins that will start dominating the cryptocurrency market but also to provide for immutable digital identity or to help protect our documents like college certificates or ownership deeds. Second- the proliferation of 5 G technology will make us bank with a lot of devices that surround us today – like the Alexa, our fridge, our car and the likes. It will also allow banking to become transparent and invisible like in case of paying for an Uber ride. Third- biometrics and overall simplification of security and lack of need to remember multiple passwords will have a big impact on popularisation of digital channels. And last but not least – advanced analytics powered by  AI and machine learning will allow us to provide our customers with truly individualized offers and create unique customer segments at the size of one – you!

If there were some key pieces of advice you would give to a bank before they embark on a digital transformation journey?

The piece of advice that I would give comes directly from my kickboxing experience.

When I am asked a question if my kickboxing skills have helped me with my transformation projects I always answer in the same way – yes of course they did! How? Well, in today’s volatile, uncertain, complex and highly ambiguous world where the changes are mostly delivered through new technologies, there is no way we can anticipate and prepare for all of them. Like in a boxing ring, you will be able to avoid some of the punches that will come and defend the others. But there will be some changes that will punch you right in the face and will make you fall. But falling down is not bad at all if you are able to stand up again, learn your lesson, adjust your actions and be prepared to fight again!