Escaping the Innovation Dilemma

[Music] okay thank you so much for coming and thank you to my panelists for being here so escaping the innovators dilemma just by show of hands um uh Clayton christensen's book 97 the innovator dilemma anyone interesting one um so if you think about disruptions and people that are driving it and even the regulatory climate around it which is the framing of our panel today disruptions people and rs Clayton Christensen in 97 wrote a book that is really a seminal Business book of how do you disrupt yourself when you're already successful or how do you just create disruptions because before the 90s technology wasn't there very large companies were entrenched and nobody really thought that anything could change but he wrote a book that really changed people's minds about how you do disrupt yourself or from the outside disrupt in so my panelists here uh Muhammad um Macio and Georgie will take us through the day uh I'm going to start with Muhammad who is masre obviously I think many here would know corporate banking Commercial Banking retail and consumer so Muhammad in in terms of disruptions and you are CIO CTO in charge of transformation whatever that means do you know what that means yes okay excellent well that's a good start so just how do you think about disruptions and driving it from your franchise perspective um you know day-to-day and long Vision oh thanks Brett thank you and glad to be here and uh share share some thoughts um disruption is is is and necessary to have right because if someone said recently I was with the McLaren team at the F1 and they said if you don't change you die right and if you don't change or if you stand still you die so Innovation disruption movement is essential right and it's been a journey between uh banking industry let's call it or high industrialized uh uh uh banking sector and how do you innovate right you're given that trust but then how do you introduce Innovation equitably and fast if I remember five six years ago I was sitting uh mentoring uh maybe evaluating some fintex uh and we've gone in the last six years to being a learner an integrator uh and a partner and you we have to do that shift right so um a couple of years ago uh a lot of finex would come for mentoring uh understanding the regulatory landscape a few years later where's the POC where's the sandbox how do I integrate with you um I know we're going to talk about regulation later uh but that that plays a big part of it um and I think just to summarize you got to play on all parts so we have knowledge and capability to innovate as a bank uh but we need to do a few things number one is invest in fintech or invest in congruent uh capabilities that come into the bank uh we have Partnerships in terms of uh just fintech and Innovation and the third is banking as a service because as a bank we have to reach through Telco we have to have reach uh uh through other partners and platforms so the whole integration with banking as a service has to come in with a level of innovation and change right so a full stack view but Partners in and really understanding that risk but managing it together so I'd even argue you have to move forward to stand still because things are moving no matter which is challenging you know standing still is definitely going backwards um so Mauricio we've talked about Partnerships and from your perspective in the capital Market's institutional space which is a bit different and more Global I guess do you think about the disruptions from your perspective facing clients looking up down and over to the tech teams so look we have to be agile in our approach to technology we have to decide uh what is intellectual property what is IP what is better that we uh build ourselves like alos for uh Market making and servicing our clients what is better that we borrow before Banks were broken up in silos and you would build technology but not know what your neighbor had and not make it scalable across the bank so we're borrowing a lot more and I think that's one uh initiative that helps save a lot of money and also you just have to adapt it to that asset class then the other is that our quants and Tech experts are a lot more open now to uh buy when it can be cheaper the product is commoditized and uh the time to Market is important especially when we need to deliver a service for regulation or a product for our clients so you're seeing the mutualization the acceleration to the action and those partners are key even in the bigger market so Georgie Georg has written a great book TR stratospheric about individuals in our space that have disrupted quite a bit over decades um so just on that point Georgie you know disruptions what about the how you know in terms of what you've learned by you know speaking to many leaders who have built Big Platforms in our space yeah and if I could touch on what was the Genesis of the book because I was a practitioner in the industry for a couple of decades and what I observed was several Visionary leaders who left F uh the traditional Finance market and moved into Financial technology and there's a huge risk that comes with that because you're leaving reputational Capital you're leaving job security so the risks the stakes are high and yet I saw these leaders who I was fascinated by because they took that risk there was a belief that they could see that unmet future that others yet couldn't see and they were solving things and problems that again others didn't think were addressable and what's really interesting is people would look at these leaders who have revolutionized markets disrupted Industries and they would call them crazy they would say you know what there is no possible way that that is achievable and yet if we look at History Steve Jobs Elon Musk there's that fine line between Brilliance and what others would Define as crazy so it is the vision but I think what really came up for me in in the book stratospheric C is yes it's about having a bold Vision but it's also about rigorous execution and measuring yourself against that execution plan so it's it's clear strategy um long vision and then short execution and so we'll move a bit to the people side and continue with Georgie so we've talked a bit about the how um the stakes are high you you know for no doubt you know crazy usually means it just hasn't been done yeah that would be my argument but what about in your learnings you know the who um in terms of the types of individuals and the character that they've had to drive these changes I'm going to speak to the character but first I'm going to speak to people because no one's an island and I think what really struck me with these leaders is they've assembled a worldclass team around them because there's one thing to have a great vision but then you've got a you know that concept but then you've got to implement it and you can't do that alone so there's something and whether these individuals magnetized extraordinary Le you know other leaders to them or whether they've created that but it's one leader said I hire The Avengers which means I'm an inch of an expert on every aspect of my business but I'm not the expert I have the go-to people so it's having those execution jockies which is critical having people who'll get done sorry but get things done I think is incredibly important and with that execution it is then measuring yourself against that execution plan because it's one thing to say we're focused on execution but but having a plan and making sure there are proper metrics that you're measuring measuring yourself against rather than vanity metrics and the thing about when you execute and you execute well if we think of investors we think of board the board if we think of your clients they want to know that you you do what you say and you say what you do so I think that encourages confidence in you because it's like there's a track record and I think the key thing with execution is as well people want to be part of a winning team so it's going to attract more people into your organization which you know ultimately then drives even greater execution yeah investors want that employees want that as well and they want you know they want to know so you need those Avengers to help you drive change even as a Superman being a reformed Banker myself and knowing maybe Banks don't always have those teams to be assembled easily so maricio from your perspective when you think about that collection of people that can drive change how do you think about that sort of up to leadership down to the operation you know all across the board I mean I think what George I want tying it back to what Georgie said I think it's very important they need to one you need to trust each other trusting the tribe is very important they need to believe the vision and they need to uh want to jump on the train with you for the senior leaders you need to uh they need to feel comfortable that you understand the client opportunity what the revenue opportunity is uh and how you're going to get there time to Market how you're going to execute and it's not how you're an execute as as Georgie said the Quant Tech I mean before they were very insular now I'm taking uh Quant to talk to clients so Quant to Quant meetings they're very involved as well presenting at conferences they're involved in the business so they they feel part if we make Revenue if we grow with clients they feel part of the business they're not in a lab uh uh not going out externally so that's how and and we also when we innovate we listen we want to get their feedback we it's not uh uh you know Draconian way of doing things it's it's a team approach and then for at the trading voice trading voice sales level it's about automation uh electronification is something that's going to uh reduce operational risk reduce manual workflows free them up to do higher value ad uh and that's how that's the carrot that gets them on board the trust point is really important and maybe there's a point of trust through failure and we'll maybe come back to that can can I build something you you both said you talked about Formula 1 you just said it you know it takes time and and the risk piece I think of when you were speaking I thought of the iceberg analogy because everyone sees the successes the accomplishments they're visible they don't see the time the setbacks the failures the challenges the defeats the speed bumps the sleepless nights the you know there is something there about it it takes time to your point with McLaren like it it's a journey you know no one arrives being the championship seven years seven years to win the the the team event yeah yeah and there may be a generational idea to change you know sometimes you need tech to just evolve over 10 20 30 years sometimes you need people to go away where the natural left and right swipers are here and the analog people go away so there is a limitation to change sometimes to drive because of generational challenges now Maro sits more in the capital markets institutional World Muhammad sits across the bank and has a consumer retail all the way up to corporate so when you think of that um that Dynamic from your perspective on people which is probably a bit different and maybe broader and even more CH it's quite eclectic when you think about how you drive change across matre in your seat for for sure so um let let me start with the sponsorship from the top okay because that that's a very very important uh cultural sponsor or cultural change and just as an example today as I was driving I was on a call with our CEO and he said what are you doing on this call and I said oh it's uh we're developing a product he says I don't want you here I am the tribe leader and I want tribe leads and Squad leads just talking to me without any heads of function so uh you know lightly can you please get off the call so he you want to send your resumes out it's not on the market yet no but what I'm saying is he is really uh sponsoring that Innovation right from the top and as he's using he he used to be head of corporate and institutional banking so he wants to develop a product with the teams and less vendor right I mean we talk about uh entrepreneurship this is where uh you develop the instead of an external party you have the entrepreneur and using the bank money instead of investing outside we invest and develop the product to be able to sell it right so we all know in the Emirates uh open finance is going to come very strong the central bank is pushing hard on open finance so as a bank normally or an lfi or you know a licensed financial institution you're going to become a third party provider to other people's data and integrate into multiple platforms so if you're not ready for that if you don't bring in new blood new people okay I I was I'm looking for a head of AI for example uh to come in in in my own own team uh I was talking to a 25-year-old data scientist where in a bank would you have been talking to a 25y old to be at the top table uh 3 years after graduation but if we don't bring that talent in uh I'm not going to have a you know without age discrimination 45 50 year old evangelizing on artificial intelligence and data science that is a you know 15y year amplification right you know and there is a digital native element to if you're not native you can try to assimilate and immigrate but the reality is you do need that base just they they're born swiping correct and that's kind of that and and David Cameron brought up the point on the importance of culture uh and we'll also bring that back to the regulatory which he also highlighted in that partnership model which certainly adgm has just absolutely nailed globally from my perspective running around the world working on these types of things so really good points on culture and people Muhammad um and the challenges of top down but that doesn't mean you're you know sometimes you get knocked out to flatten out even how things get done correct I actually do the same thing I'm very active down to our products and I I don't need my PE my people around me I can just interface direct and that's really it's efficient it's fun actually gets leadership to know what's going on without reporting up kpis um which are not that easy can I say one thing very when you see organizations fail it's often the leadership it's an echo chamber you know the the leader's idea is coming back to them which is the important you said New Blood getting that cognitive diversity that difference of opinion difference perspective you know which is is so important yeah get the leader in the room direct get the 25-year-old the room get off a zoom get the vibrations connecting in person and it's a completely different Dynamic it's like understanding by observation versus experimentation which is a big leap in in the in humanity uh Etc so just turning a bit to the regulatory framework and I'll turn back to you Marcio so regulation's a feature or bug look at Bank of America our Mantra is responsible growth so working with the regulators and with regulation is very important I see it as a market structure that you have to adapt to so just like uh platforms clients uh every they evolve and they change how they operate we have to be uh ready to adapt whether it's for clearing whether it's for Capital rwa whether it's compliant communication um we we we think we just have to be ready to adapt I don't see it as a yes it's costly it's costly and it takes time um but it's part of the market structure and it's always going to be evolved well the minimum it's part of your moat it's really your lead and it's beyond a feature it's what you focus on and then inside of that you do what you can do um and from your perspective Muhammad it's quite different uh number one it's a it's a different environment than Bank of America Global and local um and you know there's some conservatism all over the world in regulation no doubt and i' think there's even a conservatism in the Middle East sometimes and moving but this does not feel conservative in the UAE specifically and I know you know you need real Tech to make big change and it's not that easy to have the platforms local and data sovereignty and clouds and all of that but from your perspective on regs how do you think about that you know feature bug Dynamic obviously you have to be compliant but you know for you it's something it's a day-to-day you know minute to-- minute you know challenge or optimization correct so so we we we operate in multi- reggulator environment uh I can speak at least for uh uae's extremely Progressive um especially for example uh when data policies or gdpr in Europe for example and data was being um sort of regulated here the UAE uh made a draft policy and circulated that draft policy policy before a year and a half of making it pertinent for people to try it out see how they can comply and and actually the the the minister of data and AI sat with the Chamber of Commerce in order to get back and that was done with real practical Tex it was itative that's interesting because there's a lot of consultations in regs but they are all pre-implementation so everybody's guessing and and probably asked or just not or anxious no in this case that's interesting it was uh put out to experiment with before it became policy uh Cloud regulation um open banking open finance again there's a there's a very hard push now multi- regulation you also have Regulators that don't even have their Cloud policy or their data policies out yet right uh so some are pushing the agenda to share data open data use cloud um but still they don't want to go to that edge because because the regulator's job is to protect consumer right and to do things at the right pace so you don't want to innovate so much with the trust right and that treasury that treasury has to be protected for that consumer so um uh you just have to deal with the multiple regulation and the multiple Pace at the end of the day um and we need to help fex understand the regulation a lot of times the fintech in a sandbox everything works but then you say oh but your data can't be on AWS it has to be on premise or in a country or then you lose those Technologies how can you innovate then and and so on and so forth so it's a you would think with the word sand that would be clear that it wasn't that stable like drawing lines in sand correct all those types of things um yeah so it's fascinating so there's a real practical iteration between regs and you know price Singapore maybe more similar there the US has 1930s regulations that don't even contemplate computers uh and Europe has a completely different framework for regulation consultation well before any practical implementation so there probably something in the middle of all of that given history and us all wanting to move faster um and then there's the angle of globalization as well right you were standart so there's a you can say we're just in our sandbox in our country clearly UAE and Abu Dhabi does not believe that it's why this event is here and that whole dynamic is playing out so um Georgie we've got you know a couple of minutes um you know we've talked you and I have talked a lot about uh leadership quality and failing and and those types of things um and just you know how do you really Drive Innovation create trust uh and knowing it's not a 3 to five to sevene game like all PowerPoints say when you hit the Venture Capital field it's usually you know three to reel five to in the game 10 to making a change and 20 to disruption disruption Cycles are much longer so what have you learned from your you know the leaders that you've been speaking to you know for the last years you know the ones that have actually achieved it yeah you said a minute ago you use the word feature or a bug and I think when we think about entrepreneurship failure is a feature um and we were talking earlier about and we used the Roger Federer analogy he gave a wonderful commencement speech at Dartmouth where he said in his 25 you know professional years as being a pro he's played 1500 games won 80% of those but lost 46% of those percentage points and it's how again it's what the points you focus on on and then how you bounce back from that because failure is a prerequisite for success and it's not something to avoid it's not something to dwell on it's learn the lessons and move forward and many of the leaders I work with they talk about being incrementalist raising the bar every day and and it that's the you know Lance ugler one of the the leaders in the B you know raising the bar and that's his gold standard way of saying every day we're going to get better we're going to improve and sometimes that means we will make some mistakes but it's what what can we take that what can we take away from that it's like learning to ski or you know Michael Jordan has said he remembers all of his missed shots none of his Ma you know it's maybe why gamblers don't go away from the table you really the losses are very exhilarating um but if you take that exhilaration turn it into an iteration you wind up coming up with something better and that's probably something people refer to as grit and and I think at the start of the journey there are many unknown unknowns you've got you know your ater your your goal but as you know better you can do better and therefore once more information becomes available that that's when you iterate and don't be afraid to course correct I some think sometimes people get so wedded to the plan that then they can lose sight of actually what is the goal they're trying to achieve so anything to close us out mamad maybe uh I I just add on the itation fail smart right take measure failure fail fast well fast and smart right because fa fast you can fall on your face but uh you got to feel smart you got to understand the risks um and don't forget agile is important but there are other projects and programs that need transformation you asked me about transformation earlier you do need the structure of transformation and you do need the agility right I mean it's a it's really a balance um similarly innovate on the edge uh bring into the core with a level of maturity uh so you can scale that product no that's great so Jack Welch long Vision strategy clear short execution if you bring those three together with good teams you'll win overtime for sure if you don't you'll probably lose eventually if not die immediately apologies for that ending thank you for the uh attention and uh thank you to my panelists thank you thank you thank [Music]