FinTech Connects…. with Ross Sleight, Chief Strategy Officer at SomoAdd bookmark
Ross Sleight is renowned as one of the UK’s leading thought leaders in digital transformation. In his role as Chief Strategy Officer at Somo, he is part of a team that designs, builds and delivers digital products and experiences. He will be delivering a presentation at FinTech Connect entitled 'zig when others zag to create significant product differentiation’ on December 3rd at the London ExCeL Centre. Here is a preview of some of the insights he will give.
Are you able to explain to the readers what Somo do?
Somo exists to make digital things that make life better. We partner corporates, scale-ups and startups and help them conceive, build, launch and scale customer-centric digital products through our Rapid Actionable Innovation engine. We accelerate digital transformation strategies and new digital ventures.
How are you approaching the fintech revolution?
We work with a wide range of financial clients such as high street banks (Lloyds Bank, HSBC), wealth management companies, electronic bank transfer businesses like Vanguard, private banks such as Hoare Bank, investment research specialists, and extend right through to innovative fintech startups like swIDch. We help them to accelerate their transformation programmes or develop new and engaging financial products for their end customers or their employees.
Do you see financial services as ripe for disruption?
The first few waves of disruption have already washed over the financial services industry, mostly around digitalisation and optimisation of existing processes and products, led in the consumer space by the neobanks. These waves have been underpinned by an enhanced focus on operational model cost efficiencies through improving customer experiences in self-serve digital solutions.
But this disruption is CX focused and all the brands are still selling the same financial products they have been selling for decades, just in a simpler, faster and more convenient way. The next big wave of disruption will be in deconstructing these existing financial products to create new financial offerings that answer new needs for today’s customers. For example, there’s a massive disconnect between the financial products a gig economy worker or freelancer requires and the products being offered by incumbents and neobanks today – this audience needs more flexibility and integration between current and savings, credit and loan, (and insurance and mortgage products) to really help them manage their volatile finances.
So the next wave of disruption will be the development of new digitally-driven financial products and will be driven by a business model of new revenue generation rather than improved cost efficiencies. It’s also as likely to come from new companies or non-traditional financial players as it is to come from incumbents or neobanks.
How do you think it compares to other industry verticals who have gone through a digital transformation?
Every sector faces into digital transformation at different times. The more mature sectors, like entertainment, have been through multiple rounds of disruption, and it is worth noting that the dominant players in that market now are all outsiders to that industry – Apple, Spotify, Netflix, etc. These players didn’t just beat incumbents, but also other outsiders like Napster. And they did it not by improving on the current product offering, but by creating new products with new revenue streams.
The pressures on publicly quoted companies to deliver short term results to the markets opens up the opportunity for fast-moving, highly funded disruptors, but it's those who change the core product that can be the winners. So I’d anticipate disruption from a PayPal or Amazon in the current account space as much as I expect it from Monzo. What’s clear is that the Financial sector has only started on its transformation journey.
Do you see any bank currently and think they have the killer UX?
There is a feature race with customer experiences (CX) but CX alone does not create sustainable competitive advantage or differentiation. As soon as one neobank offers a new CX experience, its emulated by competitors – neobanks and incumbents alike.
CX is vital to improving digital products but a real sustainable differentiation will come from addressing the core financial product offerings. For example, in the wider fintech arena, I like how Lemonade and pay per use insurance is disrupting existing insurance financial offerings by addressing real target audience needs. I don’t see much of this happening in the banking sector today.
You have worked with some of the largest financial institutions, can you tell us a little about the work you have done with them?
We’ve worked across the B2C, B2B and B2B2C sectors in financial markets on both long-term product builds to shorter-term product conception. So we’ve embedded full-stack product teams working collaboratively with client teams to develop a tablet system for branch bank staff to help them solve customer’s problems quicker and more intuitively. We’ve implemented innovative GDPR-compliant customer journeys across devices. We’ve improved discoverability and recommendations in investment research. And we’ve spearheaded organisational and cultural change in Digital Product teams within traditional organisations.
A lot of our work has also been in conceiving new ways of engaging customers and new product ventures which is all secret squirrel. In every engagement with a client we aim to accelerate the delivery of Digital Products faster than the brand would have got to on their own, with a highly validated approach to mitigate risk and ensuring product/market fit.
How can incumbent banks not be left behind?
Focus on innovating and meeting real customer needs rather than selling existing products in a better way.
If they only improve CX, they will ultimately fall further behind as organisational friction, technical legacy debt and lack of closeness to customers will slow them down. They will become slow(er) followers. But if they leverage their historical insight, their data, even their branches which today are seen as a disadvantage, they can design new financial products that meet today’s customer behaviours.
That means a business transformation, not simply a digital transformation. Of course, their leadership has to really want to embrace this, they need significant stakeholder and shareholder support and they need to address their internal risk profiles in doing so. In my opinion, emulation is simply not a viable strategy moving forwards if incumbents want to see significant future revenue growth.
Finally looking into your crystal ball – where do you see the banking industry in 2025?
Our recent customer research for our white paper, ‘Are digital banks the future of financial services?’ asked this exact question and three broad topics emerged.
The first theme was around an increasing need for help in financial education and literacy – understanding what options customers have and why they may be right for them, so I think this leads to a more collaborative customer approach and subsequent product design rather than prevailing approach of “sell as many of our existing products today as possible”. There’s also an insight that the physical branch is still vitally important, particularly when customers need to discuss and learn.
The second theme was around inclusion. Today digital serves a highly literate and able segment of society but there is a far larger segment that is at risk of being marginalised by these developments and we need to ensure we have new digital products to serve them and not exploit them.
The third theme was the threat of new competition. If you don’t embrace financial education and inclusion, then someone else will – and that’s as likely to be an Amazon or Google as it is a fintech startup.