Heraclitus and the Future of Commercial Banking

Let’s clarify this before I lose anyone; the self-proclaimed “pioneer of wisdom,” noted Greek philosopher Heraclitus, is credited with the saying Panta rhei, "everything flows." More commonly, you have probably heard this as “the only constant is change,” but either way, this teaching has withstood the test of time, as it is not only applicable, but feels like a worldly truth when I find myself talking about today’s transaction banking landscape. A robust time of change is upon us; one that has brought us to the precipice of a new era in banking. Understanding the driving forces behind this change as well as embracing new business models will be a key to success, or even to survival.

To better understand where we are, you have to understand the growing importance of many of the technological advances we have seen over the past handful of years. In Greenwich Associates recent Top Trends in Banking report, 6 of the 11 trends cited are directly related to technology; whether it’s a focus on banks becoming technology shops or the maturation of things like Artificial Intelligence, the building blocks to support a massive shift have been organizing in the background for quite some time. 2017 is where they appear to be breaking the surface, especially when we focus on this aspect of the landscape.

Digital transformation is a term I often hear bandied about (in some cases it’s in a simple explanation of a channel strategy), but the banks that are using this term to its fullest are truly transforming their business, with digital as a central tenet or the tenet depending on the size of institution. To fully compete in the newly emerging landscape of commercial banking, moving beyond an update to “the channel,” and embracing transformation is key. Harnessing the power of AI or leveraging the new partnership ecosystem quickly emerging with Open APIs will give banks an upper hand in capturing new business.

So this brings us back to Panta rhei, or everything flows. Our friend Heraclitus would remind us this change won’t end, and keeping that front and center of our strategies is key. Quoting another famous thought leader, Charles Darwin: “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”