We're living in a digital world, and the pace at which technology is advancing seems to increase more each day. How will this impact our economy, the banking industry, and our future?
While I certainly have my own opinions on how to manage the pace of change and disruption, I was able to chat with Roger O. Goldman, chairman of American Express Bank, FSB, a subsidiary of Amex, and lead director of Seacoast Bank*, to get his perspective on our rapidly changing digital world and how it's affecting the financial industry.
Here's what he had to say:
JA: Thanks for taking the time to sit down and talk. As someone with a long and celebrated career in the financial sector--who's currently chairman of the board for American Express Bank, FSB--I'm interested in hearing your perspective on the pace of change we're experiencing today.
You've obviously seen a lot of transformation over the years, but was there a specific point in time or a certain technology that marked a turning point for you?
RG: Not specifically, no. But I have noticed that if you look at history, you'll start to see patterns emerge. It takes time for most of the big changes to really take root. Take, for example, the concept of self-driving cars. Even though the possibility of driverless cars is a hot topic today, it's a concept that has been around since the end of WWII with the introduction of the automatic transmission. Cars went from a clumsy way to get around to something very easy, and because of it, car ownership exploded.
All this to say that it's often only in retrospect that we can see what the major turning points were.
JA: Very true. But even though it's difficult to know for sure which technologies will change the future as we know it, what would you recommend to companies that are trying to stay ahead of the curve today?
RG: Well, it's a risk management situation. You need to determine: What are the risks of investing in an emerging technology versus the risks of being cautious?
I think it's more an issue for companies to consider that digital is a very useful tool and that, in addition to being disruptive, it presents the opportunity for more choices and innovations that will serve the consumer. So, rather than being afraid of investing in digital, a smart company welcomes the opportunity to explore the unknown and use it as a starting point for innovation.
JA: How do you think today's digital technologies are impacting the way we do business?
RG: Technology has moved power from producers to consumers. I think the first Industrial Revolution gave power to the producers, but the Digital Age is going to end up giving more and more power to the consumers. We're going to continue to see more choice and more competition. Think about the impact of digital on consumer power to make an airline or hotel reservation, shop for a car (friends of mine who own a dealership are now selling 50% of their cars on the web, which is up from 0% a decade ago). Information is power--and it has been that way, at least, since the invention of the printing press.
JA: As the chairman of American Express Bank, FSB and a board member for several other companies, you have a unique high-level perspective on what companies should be doing at the board level when it comes to digital. So, in your opinion, what should board members for the largest companies in the world be doing to drive their companies to become more digital?
RG: A good board member, in general, is someone who pushes the envelope or poses the evocative questions. They have to constantly ask, "What's next?", trust and verify the answers, and present possibilities in a way that the rest of the board will listen to. So, when it comes to investing in digital technologies, a good board will explore the risks and rewards--not simply bury their head in the sand and wait for the market to tell them what they should have done in hindsight.
JA: Do you have a sense of what board members might fear about the potential for disruption and the digital revolution in general?
RG: I don't think good board members are afraid at all. Instead, they ask questions like, "Where is the opportunity in this?" and discuss whether management would be able to execute on it. But keep in mind that asking this question in regards to digital technologies is no different than any other issue or change a board is faced with as the company evolves. Again, it's about risk management and figuring out which innovations make sense for the company to explore.
This concludes Part 1 of my interview with Roger O. Goldman. Part 2 will cover topics ranging from how delta is using technology to give power to it's front line employees to the impact of digital currencies. Stay tuned.
*The opinions expressed in this article belong to Roger O. Goldman and are not those of American Express Bank, FSB or Seacoast Bank.