Written by Michael James on Friday 12 May 2017
This article first appeared in Global Banking & Finance Review, May 2017
Mistrust, high wages, 2008, big bonuses, oh boring banking again. But from the goliaths to the minnows the challenges these institutions face are substantial: profit, cost control, regulation, public perception, fraud, legacy technology, and the licence. For new challenger banks like Starling and Atom it’s tempting to assume that legacy technology can safely be removed from that list but I’m not so sure. Given the number of platform providers, middleware vendors and user-interface frameworks that claim to be working with the more established challenger banks they may already be a lot less nimble than they planned to be.
As soon as you put your first customer on a fresh new platform, change becomes more difficult and you can quickly become the legacy platform: adding or modifying new technology has to take into account old products and of course the customers on it. The customers will rarely understand how complex a financial institution is and you will get no sympathy for a 100% overspend on changing ‘some software’. For me this means I should really have a more interesting hobby to talk about outside of work.
Fundamentally solving the problem 'of legacy on day two' is key to longevity, low run and change costs and your ability to create a compelling experience. Whether you manage your estate in-house or outsource elements, the key to ‘change sustainability’ is to design for change from the outset. “Change as usual” is an overused phrase but it does neatly encapsulate an essential aspect of modern life. My new phone will last 2 years if I am lucky, it gets more software updates than my data contract would like, every version has yet more sensors and for Christmas I got a smartwatch too. This means any company offering a user interface cannot stand still and has to keep up with the device in the customer’s pocket or on their wrist. That means you must re-align an approved device list, regularly re-test and re-build just to ensure a site/app still works and is still compliant on the latest operating system.
Beyond the user device lifecycle there is the agility you need to be competitive; today’s product is unlikely to be the same thing you offer next year and it is probably not going to be offered in the same way. Mobile first is the de facto starting point for User Interface development today but what will it be in 10 years’ time? A 4d Interface maybe, a direct implanted chip or even nanobots in my spine? Ultimately no one could put their hand on heart and say what digital will look like in 10 years’ time, so the ability to change needs to be built in to your company, your board room, your people and the IT.
That change ability can be achieved in a variety of ways but the key is to be brave:
- Throw away the change & governance processes that you have built up over the past 50 years and build an appropriate one.
- Embrace a componentised approach and be happy to do a bit more yourself.
- Spend small and very often, not very big and infrequent.
Most importantly stop what you are doing and take a fresh look at it, there is a well-known saying: ‘do what you always do to get what you always get’. For the past 2 decades many organisations have run big strategic programmes alongside their BAU operation to transform their technology but with conspicuously little success. To give your organisation the agility to be competitive in 10 years’ time, you need a permanent and core shift to a brave change first mindset.
This is the year you need to shift to a ‘Change First’ Operating model and a Change First Architecture so that your business can be a Customer First Company.