Technology is a demanding adversary to senior management teams in consumer banking. Many have failed to predict and harness its dual powers of innovation and destruction. Winning the technology battle is only half the story. Answering shifts in consumer behavior after each technological revolution is the other.

It is critical to correctly adjust business strategies in a profitable and sustainable fashion against these shifts. Executives play this cat-and-mouse game on a consistent basis.

The game for consumer bankers has changed radically. The last decade has ushered in not a technological revolution but an evolution. It is one so dramatic in its effects that the traditional business tool sets used by consumer bankers prove incomplete in providing long-term solutions.

Let this reinforce the sound of an alarm already ringing. The staid culture of consumer banking, with its abundance of rigid processes, cultures averse to change and compensation compression, is struggling to comprehend and react quickly enough to both technology and a new set of complex consumer expectations and behavior.

Few companies provide a better example of this than Kodak.

The power of a picture has never been questioned. Today's most successful social and digital media companies are dominated by the picture. Pinterest and Instagram are prime examples. The picture was the genesis of Zuckerberg's social giant.

Film was the medium behind the picture, the product that generated and sustained Kodak's fiscal success and its relationship with its customers.

Film became Kodak, and Kodak film. Film was an ecosystem of customers, distributors and developers that proved wildly profitable. Eventually it became obvious that film was too expensive to preserve, too cumbersome to maintain and counterintuitive to advancements in technology and shifting consumer demands.

However, senior management was unable and unwilling to wean itself and make the logical, while culturally difficult, long-term strategic business decisions necessary for the company to evolve. Instead of focusing on pictures, they wed themselves to the dying medium of film.

Kodak's death knell was not brought on by the advent of the digital camera. Kodak invented the first commercially available digital camera and its top engineers recognized the power of this new medium before their competitors. Kodak's demise was self-inflicted by a weak board and senior management teams stubbornly denying an evolution in social behavior.

Consumer banks possess deeply entrenched branch banking systems and their own ecosystem based on the Demand Deposit Account (DDA). The DDA ecosystem is a cornerstone of customer acquisition and relationships. It has weathered decades of financial crises, regulatory reform and innovation, and has until recently remained quite profitable. The DDA remains a sacred cow, an undisputed link between the bank and its customers. The analogy to film runs deep and is uncomfortably disturbing.

The time has come to realize that the DDA and its current distribution systems are headed the way of film.

The DDA will take on new life forms in a variety of products and services across joint ventures, strategic relationships and social partnerships. These are new worlds, unrecognizable to and unfortunately beyond the grasp of, many of today's embedded consumer banking leaders.

Look past depressed income statements, S-curve arguments and opinions on ideal efficiency ratios. These discussions are becoming moot. Bluebird, for instance, the Wal-Mat/Amex experiment, is only the tip of a giant iceberg.

The picture for consumer banking is now, and should have always have been, holistic personal financial management. How you acquire consumers, gain their trust and loyalty and ensure long-term relationships will be based upon an entire new set of products, services, strategic partners and distribution networks.

The DDA will be a piece of that greater relationship, as will the branch, but in less than a decade the landscape will prove unrecognizable.

This is consumer banking's Kodak moment.

Among senior leaders, many recognize, but few are acting upon, an uncomfortable reality: that the entire foundation upon which consumer banking has been functioning has fundamentally shifted.

The challenge is not external, it is internal. The pervasive feeling that digital solutions and social media are simply complementary channels is foolhardy and wrong.

Bank boards and C-level executives must take an unvarnished and honest look at their senor talent throughout all levels of consumer banking, especially product development, marketing, technology and distribution. They must see the organization not through 2014 but 2020, and assess their talent based on the future.

In the year 2000, over one billion rolls of film were sold in America alone. In 2011, less than 20 million rolls of film were sold, a 98% decline. It wasn't the technology of digital film that wielded this destruction but a systemic change in consumer behavior.

Is it so far-fetched to see a similar future for the DDA and the branch channel? If you are relying on your tried and true banking veterans to answer this question, you may wish for a new picture of where your executive talent needs to be.


Robert Voth is managing partner, financial services at executive search firm CTPartners, which is headquartered in New York.