Necessary conditions and sufficient convictions
Picture this scenario. Tomorrow morning, I wake up feeling generous and give every bank – big, small, conventional, challenger – all of them access to Foundry.
With the flick of a switch and a few lines of code, they all have a core that is scalable, secure, agile, capable of real time configurations and all sorts of witchcraft. It is robust. It is what dreams are made of. And they all have it. Do you think that means now every bank is equally good?
Of course not.
Because this incumbent over here is still fighting over which P&L should own the new infrastructure and which legacy products should get released on the new core first and that challenger over there is going down a rabbit hole of irrelevant gamification. They can both things much faster but that doesn’t help much if they are the wrong things. Propositions matter. The customer’s job to be done, matters. What you choose to do matters.
I know we have spent decades as bankers (yes, I know I am not one any more, but still) limiting our aspirations to our systems’ capabilities but that era is over. Foundry and others like us are solving this problem for the industry. Your core need no longer hold you back. Now what?
A core banking infrastructure that can sustain your digital aspirations is a necessary condition for our desired future. I get why banks who don’t have it agonise over it.
Without it, you are nowhere.
But it is not a sufficient condition. Alone, it will not produce your desire future. That is on you. Whatever you do on top of the plumbing is what the future will be made of.
And don’t look so disappointed, if the core was differentiating you would do it yourself. The whole point is that is is not. It can kill you, if it’s neglected. But it won’t save you on its own. It is necessary but not sufficient.
What you risk reveals what you value
Jeanette Winterson said that, and I doubt she expected to be quoted repeatedly in a banking blog but here we are.
She was talking about love but it applies equally well to survival.
When we are looking at radical transformation and all the cost, effort and decisions that entails, the words hold true. And what we throw, what we keep and what we change are heavily emotional decisions that reflect both our motivations and our convictions of what matters. Of what is negotiable. Of what we value.
The problem is that for most of the work the incumbents undertake, even the most ambitious ones, the Job To Be Done really being addressed is not “how does my SME customer balance their books hourly”; it is “how can I retain market share, how can I compete”. Familiar motivations. But no longer adequate as a business compass.
I remember the first time I heard the term “conviction politics” used in a derogatory manner.
It was, of course, inside a bank. It was a hallway conversation, waiting for a meeting to start, idle chat. But so telling.
The technocrats’ view of the world.
Where passion equals lack of process.
Conviction lack of perspective.
And a sense of knowing what you want to accomplish before the data tells you what is feasible, proof of naïveté.
And here we are a few years on and what used to be easy to laugh at and dismiss is everywhere. People talk about a sense of purpose in the workplace with no hint of shame. People talk about their company vision without starting with “maximising shareholder value”.
Companies come to the table leading with what they believe in. What they hope to achieve.
We believe we can produce technology that can free our customers from the constraints of old and allow them to democratise access to finance. We believe in it. We hope for it. We work towards it. The technology comes after the conviction.
So what’s yours?
Come on. Say I have given you Foundry to build on. You can build anything on top of it and it will run smoother than Alina Cojocaru on her finest day (she’s a ballerina, it’s not all APIs all the time, you know).
If I have given you the necessary condition for success, what will you do to meet the condition of sufficiency?
So far you are trying to do what it takes to serve the vision of old “maximise shareholder value”. Live to fight another day.
Nothing wrong with it. It is necessary. But not sufficient.
When the dreamers come to battle, they have dragons on their side
It doesn’t do to underestimate what you don’t understand and banks long underestimated “millennial snowflakes” as naive. With their oat milk and fixie bikes and a sense of purpose and moral conscience and all the stuff that the “real world” would knock out of them.
The millennials have grown up. And so have their businesses.
And the real world has taught them a lot, but not the need to be cynical.
They know what the sharing economies actually mean and it’s more than opening your APIs. They know what platform economics mean and it’s more than a distribution play. And they know that coming to the arena with conviction is how you win. They come to business with a vision and a hunger to achieve something they feel passionate about. Something they care about. And then the tech fuels it. If I give them Foundry they think: “YES, my time to market just dropped to a fraction of what I had feared, as did my cost and now all my team’s time, energy and creativity will be channelled into the thing that inspires and drives us, the proposition that serves our client segment, that fuels the vision of the future we believe in, that pushes us towards what ‘good looks like’.”
Some incumbents are doing just that too.
Some start-ups aren’t. Not all millennials are visionaries. Not all gen Xers are cynics. That is not what I am trying to say.
But the change in the world belongs to a moment in time and this moment is theirs.
And now we can come to our offices and use words that once would make us blush.
My first job ever had a quote from James Elroy Flecker in the corporate email signature that you could not turn off for love, money or serious hacking attempts:
“We travel not for trafficking alone, by hotter winds our fiery hearts are fanned. For lust of knowing what must not be known, we take the golden road to Samarkand.”
I was mortified at 25.
I know why it was there now.
So here we are.
Say I have given you Foundry. All shackles gone. All constraints removed. What will you do next? And why?
Because you may find that if your “why” is simply “to make money”, your proposition may carry all the cynicism of yesteryear into a future that has very low tolerance for it.
By Leda Glyptis
Leda Glyptis is FinTech Futures’ resident thought provocateur – she leads, writes on, lives and breathes transformation and digital disruption as CEO of 11:FS Foundry.
She is a recovering banker, lapsed academic and long-term resident of the banking ecosystem.
All opinions are her own. You can’t have them – but you are welcome to debate and comment!