The new David vs. Goliath: Challengers vs. legacy banks


The Philistines gathered their forces for war and David and Goliath faced each other. One a giant, with enormous power. The other lithe, fleet of foot, resourceful and unencumbered.

There are numerous similarities to biblical warriors and today’s traditional banks that are firmly in the crosshairs of the so-called challengers: Tesco Bank, Virgin Money, M&S Bank, Metro Bank, Aldermore, Shawbrook and TSB. The latter, of course, is set to join the other side, with the proposed £1.7bn takeover by Spanish suitor Banco Sabadell.

But as Malcom Gladwell points out in his chart-topping book David and Goliath: Underdogs, Misfits, and the Art of Battling Giants, the outcome may have less to do with luck and is more the result of disruptive forces and known strengths.

Goliath has unclear vision
Although Goliath is a giant, even by modern standards, he might have had a disorder called acromegaly. This condition leads to a person growing extremely tall, but also often leads to double-vision and severe nearsightedness, which means Goliath needed David to come to him to fight.

So, a big competitor’s perceived advantage can often mask even bigger disadvantages.

Goliath is traditionally restricted
The Philistines had planned to send their toughest warrior against the toughest of the Israelites, to settle a dispute in “single combat.” While Goliath is swathed from head to toe in traditional glittering bronze armour and is armed to the teeth, David refuses to be restricted and disrupts proceedings by not fighting Goliath hand-to-hand.

That doesn’t play to David’s strengths.

David is deadly
The final misconception is the idea that David goes into battle with “only a sling.”

Far from it, he is a calculating, trained fighter and his sling, in fact, is an incredibly devastating weapon. David has every intention and expectation of being able to hit Goliath in his most vulnerable spot – between his eyes.

There are no prizes for guessing the result. However, the moral of this story is that you need to know your own strengths and weakness, so you can more effectively use them to maximise their value and protect your vulnerabilities.

Lessons learned, applied to today
Far-fetched? Or a parallel to the modern-day David and Goliaths, the traditional and challenger banking battles?

Because right now, non-traditional players are challenging the established order, leading with customer-centric innovation. Like David, they are lithe, fleet of foot, resourceful, unencumbered by older established processes and routines. And they’re utilising technology without the overhead of legacy systems, offering agile and flexible customer-focused operations.

For traditional banks, a customer-centric approach creates major demands on their legacy line of business systems and processes. It is in such environments that enterprise content management (ECM) solutions come to the fore, by providing an agile middleware layer of renewed functionality, which helps increase user productivity.

In a seamlessly interoperable environment, ECM allows legacy banks to go beyond simple data retrieval, where customers may provide the initial data electronically via eforms, a mixture of electronic and paper documents or even as transferred files from account transfer agencies.

ECM also empowers you to easily capture data, auto-fill and index it across required legacy systems, updating and linking to relevant documentation stored within your ECM system, while providing management with information and reporting dashboards for increased visibility. All without the need to switch screens, rekey information or train staff on multiple systems.

Just fast, efficient interoperability, providing effective and secure data delivery.

Legacy banks would do well by taking a leaf out of David’s book, by reshaping and optimizing their own processes and operations. Embracing a strategy that doesn’t require you to replace legacy systems – or hire extensive specialist IT consultancies and developers – makes solid business and financial sense! Especially if it gives your organization the ability to instantly access real-time information.

Because being a giant is actually a weakness if you have no vision.

Working from Hyland's London office, Colin brings more than 30 years of corporate experience ranging from enterprise content management (ECM) to natural language processing (NLP) for clients ranging from the Lloyds Banking Group to BUPA. Over this period, he has seen many changes in system and solution approaches, some successful and some that should not have seen the light of day. As someone who can remember when legacy systems were mere young kids on the block, you can guarantee he will have a point of view.

Colin Dean

Working from Hyland’s London office, Colin brings more than 30 years of corporate experience ranging from enterprise content management (ECM) to natural language processing (NLP) for clients ranging from the... read more about: Colin Dean