Disruption is all around us. There is not an industry or organization that is untouched. In just 18 months, the launch of the Google Maps App wiped out 85% of the market capitalization of the GPS industry. Just 4 years after launching iTunes, Apple became the largest music retailer in the U.S. and took just 7 years to become the worlds biggest. There are more Uber cars active in New York at any time than Yellow Cabs.

Disruption has become the norm. But yet organization after organization still think they are somehow magically protected. Nokia is a great case, going from being the 5th largest brand in the world in 2007 to being so irrelevant that after buying it, Microsoft finally dropped the Nokia brand name completely from its Lumia phone in 2014. The lesson? Stay ahead or risk complete irrelevance.

Banking on the 9 Year Olds

My 9 year old son recently taught the banking industry a great lesson. He had secured €550 in cash gifts for making his communion, a religious event designed to extract cash from family and friends in exchange for a party with a bouncy castle… because let’s face it – if they had bouncy castles in Jesus’ time, he would have definitely have booked one for the Last Supper (and all those silver coins would have fallen out of Judas’ pockets). Anyway, where was I? Oh yes. €550.


So like a responsible parent I marched him down to the bank where he lodged the money to a Junior Saver account, all proud of his grown up banking experience. Later that week he decided to spend some, and like most shoppers his age, had researched what he wanted online.

Most of what he buys is from eBay or Amazon. He either wants to download or buy games, movies or buy something he has found on eBay. That day’s find was a set of ‘spy glasses’ complete with a hidden camera (he’s in the James Bond/spy phase). Who wouldn’t want a pair? So he turns to me and asks “Dad. When is the bank sending me the card I can use to spend my money?” And there it is. The question that rips right to the core of how unready the banking system might be for the millennial consumer.

An Irrelevant Product

He doesn’t need physical money. He needs digital money. He just assumed the bank would send him the ‘card’ so he could spend his own money. So seeing the opportunity to challenge, I took him to the local bank branch to ask the question in person.

The cashier told him he’d have to be 14 before he could ‘upgrade’ to a student account, when he’d then get a debit card. To which he replied “Yes but I’d like to spend my money NOW, not when I’m 14!”. I had to choke back the laughter to be honest, as the cashier didn’t really have an answer for that, nor did the branch manager as it turned out.

After visiting every bank in the town, the answer was the same everywhere. According to the banking industry in Ireland, you are not a shopper until you are aged 14, which is clearly ridiculous. You could go outside the banking system and get a pre-paid debit card from a convenience store, but for that it turns out you have to be over 18. So he solved his own problem.

He closed his account, took the cash, and put it in a metal briefcase under his bed (I told you he was a spy … I found the URL written on a piece of paper in his room recently!). So now when he wants to buy something, he takes the irrelevant paper money from its secure metal case, gives it to me and uses my credit card. The bank no longer has a product that is relevant to him.

Emerging Brands are More Relevant

And there it is. Disruption with a capital D coming the way of the banking industry. iTunes and PayPal are far more relevant to him, as Google Wallet and Apple Pay will be when they hit critical mass. We have a whole generation of consumers who are used to uploading ‘credit’ to pre-pay phones and iTunes accounts. For them these brands have far more relevance than any traditional bank. They have been there for them to help them buy, communicate and share for years. Who best to offer them other financial services in the future? Are traditional banks the Vinyl to their Spotify – something nostalgic about how things used to work?

Look at Vodafone’s M-Pesa platform (if you aren’t familiar watch the video below from Kenya – somewhat cheesy but you’ll get the idea).

 As Apple and Google prepare to own contactless payments and digital wallets, they step-change the game. Add to that the success of crowd funding and peer-to-peer lending. Brands like Zopa are growing fast, promising both businesses an easier way to borrow, and investors a new outlet to earn interest on funds. The sharing economy isn’t just about Airbnb. It’s everywhere.

So if you are a bank and think that these cultural and societal changes aren’t going to affect your business to its very core, you need to rethink your long term strategy. The very core product of banking is access to funds. Be it your own money, borrowed or invested, it needs to be relevant. Why do I need a bank at all if a brand I trust, and have been using for years to buy digital products (like Apple), will permit me to spend my digital currency everywhere and a peer-to-peer brand will lend me money as I need it?

New Business Models

As new brands enter the space traditionally owned by the banks, the banks themselves need to re-evaluate and disrupt. Should the banks own the crowd-funding movement? Will they become the brokers in the financial sharing economy? Will all their transactional data available to them on every customer (what they buy, where, how often, how much they spend and so on) become their unique asset? The answer is probably yes. The banks of the future may very well be in the ‘data’ business as opposed to the ‘money’ business, leveraging their insight around what consumers want and buy, and building product propositions to help.


Staying relevant as markets and consumer expectations change is key. Whatever the industry. Whatever the company. Thinking you know better as CEO or as a senior manager is foolish. Steve Jobs was famous for his quote about consumer research. “What do consumers know?” he quipped. “They don’t even know what they want until we show them the future”. Yes. Well as it turned out they DID know what they wanted. They wanted a Samsung as it had a bigger screen, and the brand that had created the Smartphone was suddenly playing catch up to a competitor.

Stay relevant. Be flexible and adaptive. Stand still and you will be irrelevant. Sometimes quickly. Sometimes over time, so slowly that one day you wake up to find your business over.

As the saying goes ‘if you don’t like change, you’re going to like irrelevance a lot less’



Ken Hughes, known as The King of Customer Experience on the International Conference Circuit, studies emerging consumer behaviour and helps businesses and brands establish deeper and more relevant connections with their customers.

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