What Got you Here Won’t Get You There

Last week, we cast a look back on the last 20 years of digitisation and the progress we have made. And the work still left to be done.

As we look ahead, the reality is that there will always be more technology to understand, assess and leverage that there is time or brainpower – not to mention budget – for. There will always be more innovative and creative ways to serve customers and innovative and creative ways to protect them from cyber threats and beyond.

Our industry’s ‘innovation from inside’ muscle, developed over the last 2 decades, will be very useful here. But not enough.

There are three considerations that have always been talked about so they shouldn’t be a surprise to anyone but the time to actually act upon them is now. The first is the fact that our innovation and adoption of new technology has hitherto been additive. We have embraced new ways of doing things (both technological and operational) and found them a home alongside our existing business. So different revenue models, different operating models, different risk models and technologies from different eras coexist, largely harmoniously.

Largely.

Because they increase the operational complexity of your organisation immensely in ways you may not have qualified because they happened organically and nobody ever thought there was an alternative. But there is. And that is system sunsetting to simplify your technology estate, streamline your operating model, reduce your cost to serve and increase your agility.

All of that will be needed when the time comes to respond to the next thing that comes our way in the tech space.

The second thing to be done in parallel while streamlining the tech estate within your organisation is to take a long keen look at all the things you do and determine with brutal focus what is differentiating and what is utility. And if you are honest withourself quite a lot of what you need to deliver your differentiating value-additive work will be utility.

You need it. But you don’t need to build it.
So don’t.
The work is complicated enough as it is.

Focus on ‘innovation from the inside’ for your business and the things your customers come to you for. For everything else: partner. Partner well, partner with people who see the future the same way as you and focus on their business in a way that allows you to future-proof together because you share the realistic realisation that whatever we build today needs to be resilient, scalable and changeable because the threats and opportunities of tomorrow are unknowable.

The third thing to be done is to admit that the regulator is the biggest disruptor of them all and I am here for it.

Every step of the way we see the regulators immersing themselves in the art of the possible when it comes to new technologies and pushing the boundaries of what FS players are expected to achieve. Gone are the days of checklists that allowed us to point to our valiant efforts despite (perhaps, sometimes…) the outcome. Regulators now look at the adoption of the right tools for the right outcome. And they have very clear views on both.

So we are seeing a relentless focus on transparency and data quality, for instance.

They don’t legislate the business model changes. They don’t ask for your tech architecture to look this way or that. They don’t dictate pricing.

But they affect deep change across all of the above by effectively saying ‘I know what is possible, from a tech perspective, and I know what good looks like for the market. So that’s the bar now and expect it to keep rising’.

That is the reality of it all.

The tech wave we started riding twenty odd years ago under banners of startup activity and disintermediation has grown into a paradigm shift as transformative to our societies as the arrival of electrification. It is here, it is not going anywhere and we are a part of it.

The things we feared have not quite happened.

The things we have been able to do, demonstrate we have what it takes to successfully navigate the learning.

For the next step of the journey we need to start travelling light to go far: we cannot keep carrying our legacy with us because of organisational politics and fear.

We need to start picking travelling companions for the journey: the road is too long and perilous to go it alone. Share the burden with partners you trust for the duration of the journey ahead. Not narrow specialist vertical knowledge holders who can do one shiny thing for you and no more. But also, consider parting ways with partners of old for whom the only advertisement is pedigree, as the shiny knowledge of the former will soon be pedigree and pedigree is always backwards looking.

Ultimately, what the journey to-date has taught us is that navigating the terrain is all about ways of working and an understanding that resilience, scalability and changeability are more important than any of your individual tech choices.

Especially as, lastly, the journey we are on is directionally driven by regulators whose ways of working are evidently effective and speedy and whose hunger for motion towards a transparently connected market is manifest globally.

We are on the journey whether we like it or not.
And personally I rather like it.
And we’ve done ok so far.

But we can do even better if we accept that the stage of tech adoption we are in means this now becomes the main event. And we need to treat it as such not least because the regulator has rendered it clear that there is no other direction available.

So.

Lighten the load, sharpen the focus, apply what you’ve learned and take comfort in the fact that you don’t have to go it alone. Although many do, it’s a choice and not a great one to be honest. Take this from the veterans who saw many a player go down the ‘not invented here’ path, burning time and money in the altar of misplaced ego.

Let this be another learning of the digital era: you can’t learn it all and you don’t have to.

That should be a relief.

But you need to be aware of it all and surrounded by people you trust to face in the directions you are not. Who you partner for the journey and how you divide who does what and how you hold hands on the road ahead is as critical to future success as your proven ability to turn fear into creativity and innovation.