Left Shift Decisioning, a key differentiator for Banks to be nimble
Aditya Khandekar, CFA
Chief Revenue Officer I Analytics & Strategy Leader I 3AI Thought Leader I Fintech Enthusiast
Left Shift – A software development concept.
Concept: The core concept of left shifting started from testing, where we shift the testing phase to earlier phases in the software life cycle. The goal is to test early, fix bugs close to source of issue and prevent backloading of bugs.
However, this concept broadly applies to all aspects of a software development, for example, well-structured requirement will reduce the downstream back and forth between product managers and developers. As we move further down in the software development lifecycle, the resolutions become more costly.?
To make this paradigm shift – using testing to illustrate, developers do more structured and robust unit testing upfront to improve quality upstream, lessening the load on testing team downstream.
Impact: If implemented successfully it results in:?
Left Shift Decisioning – the What?
Before we dig-in, here are some examples of decisioning for banking:
Concept: A decision build lifecycle has 4 distinct steps as described in the infographic below.
At each step there is a requirement of ‘testing’ like software development testing. To illustrate with few examples (not exhaustive) on the ‘Data and Features’ step, some the key testing steps are:
Data and Features testing (list not exhaustive):
Governance
领英推荐
Compliance
Correctness
Performance
?Left Shift Testing for Decisions:
Impact: If implemented successfully it will result in:?
Left Shifting Decisioning – Why is this so important in the current recessionary environment?
There has been a dramatic shift during the last 10 years towards digital only originations for credit. Customers are asking for real-time decisioning, with instantaneous approvals for contextual offers and services. Customers have the ability to compare offers and services across banks to make their final decisions. This implies two things, a. Banks with sub optimal decisioning capabilities could potentially lose out on good customers or get adverse select (in recessionary times) and b. product acceptance rates can be significantly lower due to competition with best-in-class banks (in digital marketplace) as well as disconnect to customer’s needs. Banks need to be able to react quickly to these dynamics to stay competitive.
If banks are able re-engineer their build, evaluate, and approve decision process with left shift decision paradigm, they will perform only relevant business analysis and compliance checks at each iteration more thoroughly versus testing for everything. Hence, they will shorten reaction time to competitor moves and customer needs while reducing overall potential for regulatory and reputational risk.
This can become a sustain differentiator in a volatile recessionary environment currently where best-in-class implementers of left shift decisioning paradigm can gain un-proportional market share and win against lagging competitors.
Chairman, CXO, Defence, IT
2 年Excellent thought process Adit, based on sound logic and sw development principles . Perhaps you may think of adding one or two test engineers, who would have access to the requirements document, so the they could build an independent test software suite for your product. Well done.