How Bankers Can Use Relativity to Power Tech Decisioning

“A good plan, violently executed now, is better than a perfect plan next week.” – Gen. George Patton Jr.

Banking has been around for thousands of years, but digitization of the industry is new and moving fast. The changes have left some bankers feeling stuck, overwhelmed with the sheer number of technology choices, and envious of competitors rocketing into the future.

Back in the boardroom, directors are insisting the team design its own rocket, built for speed and safety, and get it to the launch pad ASAP. The gravity of this charge, plus the myriad other strategic initiatives, means that the bank is assessing its tech choices and outlook with the same exhaustive analytical vigor as other issues the bank is facing, and at the same speed. This is a subtle, but significant, error.

Based on experience leading both financial institutions and fintechs, I’ve seen how a few firms escaped this trap and outperformed their competitors. The secret is that they approach tech decisions on a different timescale, operationalizing a core principle of Albert Einstein’s theory of special relativity known as time dilation: that, put very simply, time slows down as velocity increases.

How can executives apply relativity to banking?
Our industry exercises its colossal analytical muscles every day, but this strength becomes a weakness when we overanalyze. Early in my career, I reported to a credit officer who routinely agonized over every small business loan. Each one seemed unique and worthy of lengthy discussion. He would only issue a decline after investing many hours of the team’s time analyzing together; the team lost money on loans the bank never made.

The same mistake can occur when banks assess their fintech options. Afraid of missing a risk factor and anxious to please the board, executives fall into the trap of overanalyzing. There’s good reason to justify this approach; major projects like a core conversion are truly worthy of great care and deliberation.

But most tech decisions are not as risky and irreversible as a new core. Just as we can download apps to a phone and later remove them, the industry has embraced the concept popularized by Amazon’s former CEO Jeff Bezos of a “two-way door” to deliver turnkey solutions that are fully configured and ready to use in a matter of hours. Developers are writing new code and deploying to the cloud continuously, with no downtime. A few companies, including Cirrus, even offer money-back guarantees, to eliminate a bank’s perceived risk from the decision.

Tech moves fast. What can happen when a bank accepts this challenge and invests in rapid tech decisioning? There are three important aspects of time dilation to consider:

1. Even at only a slightly higher velocity, it has been empirically proven that time marginally slows down. The rate of change in time increases parabolically as velocity increases.
This means that increasing the speed with which your bank makes decisions, even a tiny bit, pays off immediately, and the learning curve will magnify payoffs as the bank improves its decision-making process. There’s a significant compounding effect to this discipline.

2. When traveling at faster speeds, time appears to be passing no differently; to an outside observer, your clock is ticking slower.
Once the team is accustomed to making good tech decisions rapidly, its normative behaviors may seem odd to outsiders. Your colleagues in other internal departments who have become jaded by previous approval cycles may not be able to believe how rapidly your bank is now able to stand up new solutions. Your firm will accomplish much more than before.

3. The faster your velocity, the more mass you accrue.
Making decisions quickly frees up time for more decisions. Decision-making is a force multiplier. It’s not just your clients who will appreciate the upgrade – your vendors will be energized as well, and far more likely to treat you as a valued partner than a counterparty.

Intrinsically, banking exists to solve problems, but to solve problems, we must make decisions. Decision-making is a core competency of good banking. The bankers who are winning – and, candidly, having a lot more fun these days – approach their tech decision process with the same care and weight as their credit decision process. They no longer make tech decisions on a banking timetable; instead, they are creating time by moving faster.