Magazine article American Banker

Innovation in the Banking Industry Needs Creativity - and a Miracle

Magazine article American Banker

Innovation in the Banking Industry Needs Creativity - and a Miracle

Article excerpt


Did you ever wonder how this idea is created? How something new occurs? C.S. Forester, one of America's great author, wrote "African Queen" and "The Hornblower Saga."

Forester filled 13 books detailing the fictitious Hornblower saga. Near his death several years ago, he penned a sliver of a book called, "The Companion Piece." It described how the invention process in his mind had taken place as he created each of the stories -- the plots and the words and the phenomenon -- of Horatio Hornblower.

He compared it to a timber in a harbor that could slowly surface from the coean floor. An idea can slowly surface in the subconscious. It appears without your urging, floating on the surface. Forester suggests this floating timber -- this new idea -- simply appears if your climate is such that ideas can be born, if your envirobment is such that ideas are nurtured.

And as this young timber floats on the surface, Forester suggests that you can describe it, its length, its color, the barnacles on its timber, and its relationship to the wave action about it. It will sink back down into the hues of time. It may never appear again unless, of course, it's in the environment that allows ideas to surface.

Forester suggests that this idea may bob to the surface again when you least expect it. This time you recognize it. Now you can describe it more completely. It has more barnacle growth on it. It is a certain color, a texture it's a certain length, it has a certain weight. It reacts to its environment. You allow it to sink bank down...

That idea can pop back into your mind when you need it. This time when you see this timber, you can describe it more completely. A idea is borne. Creation. Innovation. It's precisely what you and I need this industry -- we're not in an industry where innovation has been our heritage. The industry once required us to be much more conservative. You all recognize that that is now changing. We're going to be competing on a national basis with very innovative businesses.

You and I need to take heed of Forester's admonitions of how ideas are created. One of the requirements, obviously, is that you must be in an environment where ideas can be born.

From Drive-In to ATM

Back in 1950, the only delivery system we really had in the banking industry customers going to the main office to be waited on. I am suggesting that by the year 2000, that will be virtually unimportant. We'll still have main offices, but people won't have to go to the main offices as they did back in 1950.

Bank branches began growing in 1950 as suburban America begin to build. The drive-in phenomenon followed that. It began in Kalamazoo, Mich., in 1947. I'm suggesting that that devliery mechanism is at its zenith.

And then we began using electronics. It began in 1970... Columbus Day, as a matter of fact -- the day the first automatic teller machine was introduced in America. I believe the automatic teller machine has another great ten years of growth. It will peak out sometime in the '90s.

Automated clearing houses must continue to improve in popularity. We must, as an industry, learn how to invent that distribution system to gather low-cost depoits and to pay recurring bills in a more efficient way that the marketplace has available today. I think it will become the second most popular method by which customers get at the bank by the end of this century.

Another system is about to begin -- the delivery of financial services into homes and other locations. As we end this century, it will be the most popular method by which customers get at your bank. Your career, and our industry, will be built around the evolution that is to take place in the next 15 years. Learning to Share

There is another delivery system being born. For want of a better word, I call it the share branch. …

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