Innovation, innovation, innovation

Financial services is short on innovation.


Roger Skinner

Roger Skinner

CEO at Maxxia
Roger Skinner is Chief Executive of Maxxia a relatively new entrant in the UK Asset Finance and Leasing Industry. Roger has more than 30 years’ experience in a number of Financial Services leadership roles both in the UK and Internationally. Roger is a Fellow of the Chartered Institute of Bankers and a Founding Fellow of the Leasing Foundation.
Roger Skinner

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Introduction from Executive Producer JO DAVIS

Financial services is short on innovation, says Roger Skinner, CEO of Maxxia. Part of the Catalysts: innovation in leasing and asset finance series.

Who should be interested in this?

All professionals involved in leasing and asset finance, industry commentators, and marketing and communications professionals.

 

Innovation, innovation, innovation

Introduction

When I was asked to participate in The Catalysts, a number of thoughts entered my mind: excitement, energy, and then the thought that financial services is short on innovation.

But then I thought again. The history of money-lending, stretching back to the days of Aristotle, is a story of innovation, even though throughout history money lending has been frowned upon.

It’s only recently, post the 1930’s, that governments started to develop more sophisticated regulatory structures around financial services, and this was combined with a business approach to financial services with an underlying moral code to protect ‘depositors funds’. This established a level of confidence in the financial services sector that showed it to be a valuable contributor to economic growth and a respected and professional business activity.

Has the banking and financial services sector suffered crisis over the last 70 years? Absolutely. Bank failures, fraud, banking crisis and collapse. But the financial services sector seemed to have protected its professional image until 2006 and 2007 when dark clouds appeared on the horizon and threatened to engulf the financial world in a hurricane of events from which we are still recovering.

I started to think about at all of the things that appear to have gone wrong and remain with us, to a greater or lesser extent, today:

Inappropriate leveraging of a bank balance sheet driven by faith in an internally created risk based model, combined with off balance sheet activities, left little if any available capital in the event of a market shock.

The cardinal sin of mismatching debt and lending: not just in a modest way but across the whole of the bank – and thus leaving the bank illiquid and at the mercy of the wholesale markets.

Miss-selling of financial products: from mortgages to Insurance to both businesses and consumers.

Banks and credit agencies working together to present low quality debt as ‘A' rated and then packaging this debt for sale internationally.

Ignoring the historic banking moral and ethical code that permeated the City of London from 1800, based on the London Stock Exchange dictum meum pactum (“My word is my bond”) where transactions were agreed with no exchange of documents and no written pledges being given. It resulted in LIBOR and Forex fixing.

So the financial services sector has been innovative, but the innovation appears to have been built around circumventing regulation, circumventing legislation, circumventing taxes and maximizing income.

Six years on the industry is still seeking to rebuild its moral and ethical code, and with it confidence in the sector. We may still be some years away from this and perhaps for some Institutions’ trust and confidence in their business practices will never be restored.

Innovators make the world better

When I was establishing my own financial services businesses, I was struck by an article in the Start Up Guide by Ryan Allis, who said:

Innovation is the process of creating something new that makes life better. Innovation is impossible without passion. Innovators see the world differently. Innovators end up becoming obsessed with taking the world from as it is to as it should be. They become obsessed with making the world better. Many innovators in the for-profit sector focus incessantly on bringing value to market.

Innovation comes in many forms, across all sectors of industry and commerce and from people with entirely different backgrounds. Regardless of the sector we play in we are all relentlessly focused on solving problems and creating a better world than the one that exists today.

Unfortunately this did not seem to match the ethos of the financial services organisations that I had left behind, and so I was determined to lead a business that would be different with a culture, values and business practices of which we could be proud.

With my 35 year background in financial services will I and the organisation that I lead – Maxxia UK – have the appetite and passion for innovation?  Absolutely yes – as do my colleagues and our joint venture shareholder McMillan Shakespeare which  was founded in 1989 by Anthony Podesta. Anthony pioneered the outsourced Australian remuneration services industry.

With a focus on transparency and collaboration with customers Maxxia creates finance solutions that meet the individual objectives of an organisation. In our discussions we start with the company – not the asset – and work collaboratively to offer the solution that will help organisations in their investment programmes.

Our intention is that our customers will experience a real relationship that involves absolute clarity and genuine trust. Combining the four core lending principles (cash flow, competence, character and capability ) with our core values of trust, transparency integrity and empathy we start to build to a new innovative approach for our customers.

 

CC BY 4.0 Innovation, innovation, innovation by Roger Skinner is licensed under a Creative Commons Attribution 4.0 International License.