Factory to Airport : A model for Open Banking?

“Networks inherently bring a unique challenge. When value moves in a straight line (as in the case of pipes), it can move in only one direction.” 

-         Sangeet Paul Choudary

Banks, by DNA, are organized in a straight line - front office, mid office and back office. Incremental value is accrued from origination all the way to execution, irrespective either a fee or fund product. Software has helped industrialize and naturalized the ‘assembly line’ approach to value creation i.e. ‘going through’ all the 3 components, linearly. Just look at the 'value chains'.

Intuitively, ‘Model T’ approach and adapted concepts of efficiency, like Six sigma, may have further cemented the model. The model has been further ingrained through evolution of an ecosystem of providers, much like OEM component provider(s), to drive execution, predominantly in an ‘input’ mode.

When faced with a de-walled world, can a factory model survive? What design nuances can be adopted to prepare for a position of advantage?

Airports?

Airports, by design, are open. Diverse stakeholders interplay as per invisible schedules, orchestrated to perfection. Airports are fascinating in more ways than one: 

§ Most busy ones operate 24x7x 365 days

§ Run and Change are two sides to same coin. There is no downtime.

§ Core actors are invisible. Only the overlay services are visible.

§ Diverse revenue streams

§ Various types of players deliver and draw value

§ Layered for - inflows and outflows, local and cross-border handling

§ Loosely standardized, globally, to support interoperability e.g. identification, code sharing

§ Differential pricing is embedded - e.g. timing, proximity of gate

§ Security and Service 'co-exist'

Those features sound like that of banks? Well almost. The differences are also evident.

Here are some questions to design the way forward, ala, Airports:

§ What is the ‘runway’ equivalent capability that can be used by all market participants?

§ What is the ‘in-house / flagship’ airline-like line of business/ product, that utilizes core capacity while enabling smaller airlines (Players) to operate adjacently.

§ What should be ‘ATC’ like equivalent capabilities to deliver assurance services as per agreement

§ Enrolment of adjacent connectivity options that are pay-as-you-go like - Airport Hotels, taxi

§ What are the overlay commercial services that can be realized? (Equivalents of food and beverage, retailing etc.)

What are the ideal times to embark on an Airport like vision to Open Banking? Here are a few:

§ M&A

§ Core platform replacement - prepare for higher value, than just switch IT

§ Embarking on a digital standalone subsidiary (See article on ‘Digital Bad Bank’- https://www.dhirubhai.net/pulse/could-bad-bank-model-help-banks-herald-digital-msp-prince2-/ )

§ Anticipating EU like open banking regulation or seizing the narrative over non-bank competitive initiatives

While Banks are making progress on Open banking, an overarching vision shaped by an Airport like thinking can tie the initiatives together and guide the overall transformation. What do you think ?