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Digital is the core, data is the asset

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I just delivered a two-day immersive course in digital transformation for a bank and found myself regularly saying digital is the core, data is the asset. It did trip off the tongue nicely, but it also summarised the essence of what digital transformation is all about.

You start with digital as the core. You build your business model with digital first, at the core, and then add everything on top of the digital core. What is a digital core? The digital core is cloud-native, internet-born, built for omniaccess and the leveraging of data across all devices.

Digital at the core is a company built from day one to be networked, connected, virtual and augmented. Digital at the core does not consider anything physical until the digital core is operational. Digital at the core is completely open, using plug-and-play software to connect with anything, anywhere, anytime.

The thing is that this all sounds great, but a company with digital as the core is nothing if it does not have data. Data is the asset.

You cannot leverage artificial intelligence, machine learning, data analytics, APIs, open systems, apps, devices and services without good data. As I’ve said many times, how can you be artificially intelligent if you’re dumb with data?

The main thing here is that this line digital is the core, data is the asset, explains why so many traditional firms are hugely challenged by digital transformation. This is because most traditional firms have physical at the core and buildings as the asset.

The turn-around of thinking from analogue (physical) to data (digital) has been emerging for over a quarter of a century and yet, when I talk about it, it still feels fresh every day. That’s probably because most traditional institutions have still not moved to a digital at the core, data as the asset, cloud-native, born-on-the-internet business model.

There are plenty of people who understand this model – just ask any fintech – but the idea of a platform-based business that operates with partners through an ecosystem in the cloud still seems alien to many traditional banks.

First, most banks do not want to partner or open up to third parties. They resent open systems and open banking, and would rather do everything in-house. It’s in their DNA.

Second, if they do open up, they tend to abuse the relationship. Rather than treating partners as equals, they treat them as slaves. That does not bode well in any relationship.

Third, because the bank’s systems are fragmented and implemented in various years and decades, there is no way to be digital at the core.

Finally, data is the asset but, because of the fragmented line-of-business based structures, it cannot be leveraged. The data is dumb, locked into systems that may be decades old. To leverage data as an asset, it needs consolidation, rationalisation and leverage. That’s hard when the data is spread all over the organisation’s systems.

Maybe I’m being harsh, but any bank that wants to be fit for the future needs to get someone in there to sort out the mess of the past and create a bank where digital is the core, data is the asset.


Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, 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...

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