Everywhere you look, very complicated things are being done by people without very much training in how to do them. Have you noticed? Finance people are building super-complicated computer models without any formal training in computer science. They can do that because the tools of production of complicated models have been democratised in the form of Excel.
Elsewhere in the business, work-flows with complicated approvals and integration with other systems are being built by workgroups. Perhaps they don’t call what they’re doing workflow, but they are doing it nonetheless. Here too, the tools of production of complicated business processes have been democratised.
Actually, it is happening everywhere, and not just in technology. The other day, I cam across a document by an intern that featured super complicated monte-carlo analysis as part of a forecast. Not that this intern was especially statistically trained. It was just that the tool was easily accessible, so it was used. Complicated statistics democratised.
Somehow, all this democratisation of complexity has happened under our noses without us really noticing. But there is a significant take-away I get from this. What people want is not a specifically engineered function that solves a specific problem.
They want generalised tools they can use to solve problems for themselves.
They’re bored of doing requirements and testing, and the cost load-up that comes from formal projects. They can solve an increasing percentage of the problems they have themselves. And the pace of things has moved along so much that now, there are sometimes few choices but to go it alone to meet market demands.
I think that we’re getting close to the time when what we build to run our financial institutions will not be monolithic feature sets, but platforms that our people combine together to do new and interesting things. We will have little understanding in advance of what those things might be.
If anyone doubts that end-users are capable of this, one has to look only at the rise of FaceBook in this area. When they launched their platform a year ago, there were hardly any applications. But now there are thousands, and all built by users. Same story with SalesForce.com, but in a corporate context.
I’d imagine there are two steps in the ultimate journey for institutions who want to take advantage of all this democratisation of complexity.
The first is to realise that in the relatively short term, systems that can be customised by their owners have significant competitive advantages compared to those that can’t. Parameterised core systems are a key example. When you can roll out a new product on the say-so of a product manager without a huge IT fuss, you are going to be in a much better position than otherwise. Parameterised systems are good, of course, but really amount to handing over the levers of a system to its owner. The real key is to let system owners themselves make new levers. Doing so makes it possible to harness the democratisation of complexity and drives an innovation agenda.
But the second step is more radical by far. Let customers make levers too. Let them mash their banking services into new and unexpected things. Do it from within a walled garden so that the key service provided by the bank is safety and trust.
Then, what you have, is an institution that is successful not only because it has the best people, but because it has the most engaged customers. Customers that choose to co-create the bank. The sort of customer you’d definitely want to have working with you, and not against you.