Mark P. Dangelo: 2020—Where Are OUR Attack Points?

Mark P. Dangelo

For those financial services and banking organization leaders, the dawn of a new decade brings considerable uncertainties. First, what will the political landscape look like and how will it impact regulations and consumers in a short 12 months? Second, as technological innovation begins to displace workers and automate tasks using synthetic intelligences, how will it impact institutional business models and profitability? Third, with consumer attention becoming shorter and loyalty driven by false narratives (and “facts”), where will risks surface and how can they be anticipated and mitigated? Fourth, across industries flush with dark and transformed data, what reality is buried within—if there is a forecast that can be vetted? 

Like major publications (e.g., Forbes) I could list the top 100 security challenges, the top 100 AI projections, the top 100 (now genetic-driven) dating apps, or even the top 100 consumer “realities” compiled from c-levels each touting their market offerings and projecting them as THE game-changers. However, in our rush to adopt and adapt to new innovations, are we just looking for the prescription to make the pain go away, or are we performing diagnosis of what is possible, can we do it, or better yet, should we do it? I don’t know about you, but I always wonder how many of those top 100 lists are on the agendas of #FSBOs and their internal lending operations this coming year? 

Are You Ready for Some…Chaos?

At this point, 2020 budgets have been set—just in time for end-of-year playoff games and holiday parties. McKinsey estimates #FSBOs spend only 35% of their IT budgets on innovation, or less than half of their fintech competitors. However, over the past decade, the top four #FSBOs now control more than 55% of all domestic assets—with the other 5,299 FDIC institutions (Q3, 2019) sharing the remainder of $7.8 trillion.

Will size and scale be enough to keep-up or will it require fundamental shifts in areas such as strategy ( (for innovation)? As the first full decade of the new Fourth Industrial Revolution or 4IR (see World Economic Forum—WEF—whitepaper:, will enterprises be able to be found among the chaos and chatter that creates fragmentation of messages and consumer technological fatigue? 

Moreover, in a WEF article listing the top 10 global business risks, only two deal with innovation—the rest deal with the environment, politics or social change. Did anyone during their budgeting cycle take stock in the Oliver Wyman paper establishing a need for banks to internalize “continuous integrated planning” where “the most important step is to begin”? And, we cannot ignore the Amazon re:Invent announcements that moved AWS from its foundations into #FSBO data centers with products and services that include Wavelength, Bracket, Outposts, Local Zone and nine new instances of EC2. Oh, and what are you going to do with the new chip announcements for future use from Amazon, Intel, and AMD?

The pace of announcements just doesn’t stop. Already Apple is rumored to be cutting 25% of its iPhone 11 capacity (i.e., slow consumer sales) due to the 5G features that may be, just may be, in the new yet unannounced, iPhone 12. Consumers seeking the next wave are putting off phone swaps, resulting in some advanced tightly integrated third-party features also being postponed. The complexity and sometimes propriety implementation of blockchain is being tackled with new third-party services (i.e., Blockchain-as-a-Service or BaaS, as is the increasingly ubiquitous presence of IoT devices rumored to reach 6 billion devices and progressively tied to consumer wearables. 

You see the challenge? There are many and they don’t stop—they won’t stop. The progression of innovation will not as some are hoping, somehow slowdown and let our institutions take a breath. While some academics believe that it is all a house of cards that will stop as Moore’s Law reaches it end, there are others already moving into the next phases in areas such as quantum computing (see Intel’s commercial announcement of Horse Ridge where activities that might have taken thousands of computing years can now be done in minutes. The takeaway, besides the fatigue of it all, is that planning and budgets, once set in stone, cannot hope to adapt to the next decade without comprehensive adjustments to business cultural norms. 

The Changing Face of Skills—and Age

When #FSBOs begin a proactive data capture and analysis customer culture, they need a minimum of two skills sets—data engineers to ensure content and integrity, and data scientists who have the business acumen plus the scientific and mathematical capabilities.  Yet, the concentration of highly skilled, innovation professionals are contained within less than a half-a-dozen locations domestically (see Brookings The very disciplines that #FSBOs need to retain any control over the consumer’s financial data (now at less than 35% of the total), resides with an ability to stay relevant—hence impact the data.  However, as clearing moves into a P2P model, the dogmatic chokepoints designed into the processes from 100, 50, or even 10 years ago are being bypassed by technology and non-traditional competition. 

So, as the data impetus changes business models, banks (and lenders) find themselves without critical masses of highly skilled personnel able to cut through the morass of models and forecasts. They find themselves cautiously believing in their analysis, but they are not sure if there are hidden risks or improper vetting that could destroy top-level decisions. Regulators are rushing in, but they are about listening to their industry personnel who also lack the proper skills. Regulation based on what they understand is precisely what led to the last financial crisis—compliance is about after-the-fact, seldom about anticipation in a highly innovative world.

Where will the new skills come from? Who will decide what profiles are suitable? Will the demand push qualified employees into burnout thereby creating even more of a void? And, if the enterprise in 2020 embarks upon “reskilling” what will the programs look like, cost, and more importantly, contribute to the corporate profitability? And, while I’m at it, how will you reskill while dealing with the fact that the average age domestic worker today it is over 38—in 1970 the median age was just over 28. Will you and the enterprise be investing in younger college graduates already in very scarce supply, or create skills in business personnel who can become the sought-after data scientists necessary to interpret the data? Will you give “quarter” to loyal employees over potential employees? Is any of this in your 2020 budget?

2020 is Just the Beginning of Innovation Singularity

Our love of innovation is not just accelerating, we cannot even find the lines anymore to define where people begin and technology ends. If there were doubts before the trade wars started, the idea that economies function solely within their borders has been exposed—like the preverbal emperor with no clothes. 

At the upcoming 50-year Davos summit, topics will focus on the rise of the developing nations, the size of corporations and their cultural influences, and of course, the need for skills now common across the globe. Indeed, it seems that #FSBO leaders and their highly priced consultants have now realized the disparity that once drove economies are now secondary to income inequalities, rising nationalism and populism, and a need for data intelligence that does not favor large over small. One might read the projected coverage as #FSBO and world leaders who are increasingly afraid of what may happen should the economic “pause” becomes an economic “fall.” 

The start of the new decade, the meticulous planning that is done to arrive at budgets and wage increases, will become a robust exercise if c-level leaders cannot get a handle on how they can be nimble in the face of continuous change. Budgets reflect the knowns or the anticipated based on history or competitor movements. The problem is we have limited insight into the hypercycle pace of innovation now taking place. The idea that we can merely embrace trends to promote profitability is a fallacy laid bare in the new decade. When looked at holistically, this will be the decade where history will write the rebirth of #FSBOs or chronicle their demise into a complete utility model (much like a water or power producer). 

We know the not-so-pleasant saying about those “experts” offering their opinions—“opinions are like …” Indeed, not all the thousands of opinions on what 2020 holds will come true. Beneath the glassy surface of the lake teeming with options and suggestions, is where the real work must be done, must be aligned, and must be continuously adjusted for relevancy.

The foundation blocks of strategy, being “found” and choosing are attack points are in flux. Those leaders who can orchestrate the building blocks of innovation with consumer-driven business vision, will be the market leaders on the podium at the 60th Davos gathering. The largest challenge will be sifting through the endless advice and opinions on what #FSBOs should be doing. So, where do you think your enterprise will be by the end of 2020? 

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA Insights welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at; or Michael Tucker, editorial manager, at