For a mature bank the ability to address new requirements comes down to one thing; agility! To be completely clear I am in no way referring to the Agile software development method. What I am talking about is transforming a bank for quickness, lightness and ease of movement. In ongoing discussions I have been having on the topic the correlation between agility and complexity has become clear.
Nowhere in a bank is the correlation between complexity and agility more visible than in its technology group. A modern bank is, at its core, nothing more than services supported by technology. Technology is where the rubber hits the road in banking. The ability of a bank to meet market demand quickly with new services has a disproportionate dependency on its technology group. When a bank’s technology infrastructure lacks agility the entire bank immediately sees it and feels its affects. They see it in projects that have significant overruns in schedule and cost, or fail completely. Business groups see it when they ask for a single new data field to be added and are told that it will be an 18 month project with a $1.5 million dollar budget.
This isn’t due to incompetence, stupidity, or lack of talent or passion it is due to complexity. Ask the technology group why, what should be a simple project will take so long and cost so much and they will tell you it’s complicated. Technology is the most visible example of complexity within a bank but only because it tends to be the longest pole in the tent. Complexity within banking extends into operations, processes, procedures, and organizational structure. Defining new requirements, detailing deployment plans, and developing training all take longer in a bank than is necessary because of complexity within the overall organization.
Historically we bankers have adjusted our expectations and learned to work within the complex systems we created. When I say we I mean it. I am just as culpable and complicit as the next guy in creating complexity. I’ve made decisions to save time and money on projects at the expense of future agility and I did it by adding additional complexity to the overall system.
Reductions in complexity will lead to increases in agility. Understanding and benchmarking your existing technology complexity is the logical and best first step. Measuring complexity and applying benchmarks to projects via initial solution planning will allow the entire organization to pinpoint the complexity, understand its effects, and start assessing the overall costs to the organization. Business casing required foundation upgrades, projects, and programs that reduce your organizations complexity will become easier.
If you would like to learn more about complexity measurements within banking please contact me.