Interpreting an Infinite Mindset in Modern Core Banking

During a recent conversation, Simon Sinek, leadership guru and eternal optimist, reaffirmed his belief that an infinite mindset is central to long-term business success. He further suggested “The goal is not to be perfect by the end, the goal is to be better today.” In this blog we consider his thoughts in the context of bank modernization and how technology can act as a certainty equivalent in an uncertain world.

Simon Sinek champions what he calls “the infinite mindset”. Why? He views business as an infinite game, with an unknown number of players, an unlimited number of outcomes and no fixed duration. He argues that a finite mindset – that which is governed by quantifiable criteria – is unsuited to an inherently uncertain business environment. He believes that what really matters in business is the trend or direction of travel.

It’s hard to argue against Sinek’s view because times do change, and the pace of change is accelerating. But for the most part we manage through short-term objectives. Virtually all businesses are characterized by quarterly results and annual reports, while staff receive periodic appraisals with milestone markers of success along the way.

In business there’s the axiom that what gets measured, gets achieved. Banks have multiple stakeholders, so there must be some quantifiable measure of performance to ensure cohesion and monitor progress. The sweet spot, however, is creating an environment where short term goals do not preclude an infinite mindset; this is where all things can become possible. Let’s consider the case of bank modernization.

A Modern Banking Platform as a Certainty Equivalent

Every bank needs to plan for success in an uncertain world. By uncertainty, we mean a future that cannot be predicted or quantified. All banks need to modernize, but they also need to be able to pivot and adapt quickly to change.

Economists cite uncertainty as a principal reason to hold money in preference to any other asset. In this case money is held as a “certainty equivalent.” With an unlimited number of uses, money offers a buffer against an uncertain future, that “rainy day” that people like to hedge against. By holding money, people can respond to emerging threats or opportunities quickly. In a similar light, banks need technology that offers a buffer against uncertainty.

A modern banking platform can be interpreted as a practical manifestation of Sinek’s infinite mindset. Modern technologies can insulate a bank from an incalculable future, while empowering it to do things quickly and adapt. Digital technologies and open banking have disrupted banking forever, and the transformation has only just begun. People spend more time banking than ever but seldom visit a bank. Increasingly they bank online or through apps, often provided by third parties. The trend is clear, and all banks must recognize this reality.

Over time, open banking may define what it means to be a bank. Banking and payment services are increasingly embedded in non-bank networks and delivered in context, where consumers want them. With a modern banking platform, a bank can break out individual banking services and distribute them where they are most needed.

A modern banking platform supports hyper-personalization of products and services, quickly and cost effectively. The key point is that bank modernization is a journey not a destination. And the reality is that it’s a journey into the unknown.  

A Guided Journey Towards an Unknown Future

A modern “core” platform empowers a bank to redefine itself continually. With technology taking center stage throughout banking, the core transformation is also about the bank’s brand, culture and all that’s good about the bank. In the digital age, a bank’s core determines the customer experience and how bank services are delivered.

In an open banking environment, the bank’s technology can accommodate new business models and channels to market. Bank products may be marketed directly, sold via third parties, and/or co-mingled with other parties as part of an aggregated service. These new routes to market are only available to banks with the right technology to deliver them and the agility to fine-tune and adapt services to meet emerging customer needs. This is why every bank needs both a feature/function and technology roadmap.

Digital Platforms Built for Change

With the right modern technology and partner, a bank can build a roadmap to a successful future without precluding its options to adapt on the way. To achieve this, a modern banking platform encapsulates three essential attributes:

Component-based. All components must be self-contained to accommodate continual change. With modern Agile methods, including DevOps and continuous delivery, anything can be changed at any time without affecting other code components. A component-based core empowers a bank to embrace uncertainty, confident in the knowledge that it can pivot and adapt as required.

API-first. In the age of open banking, all banking components need to be made available for consumption throughout the bank and also by third parties. With the right application program interface (API) architecture, a bank can become more agile and fully participate in the growing real-time financial ecosystem. 

Cloud native. In the digital age, a successful bank must be data-driven to give customers what they want, quickly and cost effectively. Only cloud can offer the computing power and flexibility required to leverage the latest technologies, such as artificial intelligence, machine learning and advanced analytics. With a cloud-native core, banks can keep pace with the latest developments in security, resiliency and regulation.

An infinite mindset can coexist with short-term objectives, as long as these don’t preclude future change. Bank modernization is a daunting challenge, and a journey into the unknown, but the possibilities are boundless. As Sinek says, ”Dream Big. Start Small. But most of all, start.”