I don't normally share press releases or advertorial, because this is my blog and it's meant to be neutral and independent, but I have a stake in 11:FS and so this is different.
11:FS, for those who are unaware, are a challenger consulting firm, focused on FinTech (click links on my blog's banner above). I'm a non-executive director of the firm and would also claim to be the guy who coined the term Banking-as-a-Service ten years ago.
This week 11:FS announced news that they have developed a Banking-as-a-Service platform called Foundry, and that DNB, Norway’s largest financial services firm, is the first customer. DNB have invested £3 million in the project, giving them a 5 per cent stake in 11:FS Foundry. The Norwegian bank intends to use the new product to optimise its unsecured credit offering.
Rasmus Figenschou, Group Executive Vice President for New Business at DNB, said in a statement: “We enter into a partnership with 11:FS, one of the leading companies on financial technology in the world, to explore the possibilities of developing the value chains of today’s banking one step further. The first task for this partnership will be to see if we can optimize the value chain for unsecured credit at DNB.”
David Brear, CEO of 11:FS, said of the launch: “We have established a world-leading team for 11:FS Foundry and wanted a partner to match our aspirations, who was looking to build the next generation of banking services. 11:FS and DNB are perfectly culturally aligned in our belief that digital banking is just 1 per cent finished and we are going to put in the work to improve this. We could not have found a better launch bank and initial investor for 11:FS Foundry than DNB. We have a shared vision of how to make banking better, with the passion, skill and determination to remain the forefront of delivering innovative financial services.”
So what is Foundry all about? Well, let me hand over the proper introduction to the one and only Leda Glyptis, Chief of Staff at 11:FS.
CORE STRENGTH: GOING BACK TO FIRST PRINCIPLES WITH 11:FS FOUNDRY
Ever wondered about the difference between digital and digitised financial services?
I have been a banker for most of my career and, unlike many other recovering bankers, I embrace my banker-ness with pride. I have been a long-standing member of a complicated and highly specialised industry that has successfully retained usefulness and profitability for a long time. That’s something to be proud of. And something to strive to hold onto.
The reality is that the advent of market-ready digital capabilities and the simultaneous arrival of digitally native services in other verticals means that customers and regulators expect banks to ‘get with the programme’. Trust me, we want to. We are happy to learn this stuff, invest in it, hire for it and use it to make our customers and shareholders happy. Although I am not for a moment suggesting this process is easy or devoid of resistance, the resistance is not where the digitalisation effort falls down. Sadly, that tends to be a bank’s core infrastructure.
After the painful and long-winded negotiations with risk and compliance (for the new idea), strategy and product (for the new idea’s business home), infosec and operations (for the new delivery approach), HR (for the new talent) and financial control (for the new budget) it is a horrible but eerily predictable realisation that the hardest part is about to begin.
Because the digital service, new proposition, new seamless customer-centric journey or real-time intelligence engine we designed and tested, is assuming the new tools go ‘all the way down’. To a fully digital ledger. To real time reconciliations. Away from data lakes and end-of-day processing.
To do all that is possible. But historically it has been the absolute no-go conversation for banks. If you suggested that your new finance management solution, or asset portfolio carbon footprint calculator, or new risk engine needs to be digital ‘all the way down’ your idea wouldn’t make it past the moment you uttered that sentence.
Why?
Because of three deep-seated beliefs that until recently were largely true.
1. We have a bank to run. Today’s business runs on these core banking systems and we cannot afford the disruption.
2. The systems are under pressure anyway. Lights-on costs and life-prolonging upgrades are slow, expensive, disruptive and the mere thought of trying to get the system to do more feels like a risk too great and a bridge too far.
3. These things are expensive. And although cracked, the old set-up ain’t broke. So don’t fix it.
Hard points to argue against. Until now.
Enter left 11:FS Foundry. Our answer to the question ‘given I have legacy and fires to fight and clients to deal with today, how do I digitalise for tomorrow without breaking the business I am trying to save?’
You digitalise all the way down before you go all the way across.
11:FS Foundry is a cloud-based and truly modular approach, allowing customers to deploy an entire banking stack, or select services, depending on their appetite or go-to-market strategy.
That means that the hard question of ‘where do I start?’ can be treated as a business question. One that asks ‘Where do I have the greatest market need or opportunity? This removes the rather more common ‘Where do I have the greatest need and the fewest legacy constraints?’
Once the business decision has been made, 11:FS Foundry allows the delivery of digital services that talks to legacy systems but is not living on top of them. It’s digital all the way down which means higher service development efficiency, lower total cost of ownership for high quality, digitally native services and no compromise to either your current or future business.
You don’t need to crack the core banking system question first. You don’t have to go all the way across first. But, equally, the last few years have taught us that the attempt to precariously balance digital services on top of our existing infrastructure doesn’t work either. To be digital a service has to be digital all the way down (if you want to avoid David M. Brear’s lipstick on a pig badge).
11:FS Foundry solves this.
It offers banks and financial services players of all sizes a path to delivery that goes all the way down. It also offers the choice to go all the way across at a time, pace and cost that means you can have the conversation first.
In my entire career in banking ‘core banking systems’ were the domain of big bills, furrowed brows and weaknesses through age, complexity and strain.
It is time to reclaim the core as the domain of strength, agility and resilience.
At 11:FS we absolutely believe that our customers’ aspirations were not matched by their core capabilities. That’s why we have built 11:FS Foundry. We are excited to see customers shed the constraints-based mindset and explore how to build their distinct, market-leading, highly differentiated digital services all the way down. 11:FS Foundry lets you actively build core strength for future business.
Want to know more? Click here to see what Foundry has to offer.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...
