Banking on change
Fredrik Lindström joined the Commonwealth Bank as CDO in 2020, the same year it invested in buy-now, pay-later service Klarna and launched venture-building entity x15ventures.
A consulting firm once described the role of chief digital officer as having a limited lifespan because once digitalisation is embedded across the organisation, their job is done. Is that true?
A common misconception is that digitalisation is taking what you’ve always done and making it digital. But you reach a pivot point when the amount of digital capabilities available creates new digital opportunities that never existed in the physical world. For example, it used to be that a net bank looked like a virtual branch – and that was useful – but now you can easily connect the bank and customers’ environments with, say, accounts payable and accounts receivable; the customers’ ERP [enterprise resource planning] systems could be connected. You can generate value that simply wasn’t achievable before.
What types of technology are you most excited about?
This is perhaps a disappointing answer: data – transforming data into insights and information. People are still people in the digital world. Everyone wants to be recognised for the individual they are. Banking was obsessed with fintechs a few years ago because they’re good at providing a personalised digital experience. If you don’t know anything about your customer, you’ll provide an anonymous, irrelevant digital experience, which you have to avoid at all costs.
Do you encounter innovations that customers aren’t ready for?
In banking, we have an important role to play in that. Some of the things you allow – and almost expect – Google or Facebook to do for you are a no-go zone for us. We have to remain a trusted entity.
What, apart from the COVID-19 pandemic, is changing customer expectations?
The expectations of a digital experience are set by somebody else and have been for years. When you have a great online experience on Amazon, you expect the banking digital experience to be on a par. As digital services get connected, it’s becoming increasingly easy [for customers] to source from many parties and the benefits of being a universal financial-services provider diminish. So the user experience is absolutely king.
What’s the biggest challenge of your role?
The technological innovation around us is far more than we could ever digest or pretend to understand so we have to remain focused. If things aren’t relevant [to the bank], we have to have the courage to say, “You know what? Fascinating technology but for our purpose and our customers, that won’t generate substantial benefits in the next two years. Therefore, we’re going to park it and revisit it.” We need to forget this fear of missing out.