History is littered with stories of humans vainly attempting to solve problems incorrectly. Take, for example, the Leaning Tower of Pisa in Italy. Over many centuries, engineers focused on preventing the collapse of the globally renowned landmark. Only when they shifted their attention to the root cause of the tilt – faulty foundations – did they stabilise the building.
Another instance of a society approaching a problem from the wrong angle caused something of a stink: the Great Horse Manure Crisis of 1894. According to legend, panic ensued when The Times newspaper reported that the streets of London would be buried under 9 feet of horse muck in 50 years’ time.
Deploying more horse-driven carts to collect the growing mountain of manure added to the problem. Thankfully, the situation never became as bad as The Times allegedly forewarned because technology in trams, buses and cars swept in and rendered the horse obsolete as a mode of transport.
And so we turn to an oft-cited problem that is said to be blighting the financial services industry. That is operational silos with banks and other large financial institutions. The conventional thinking is that different departments working in isolation make it extremely difficult to implement innovation. The cure for this ill, we are regularly told, is elimination.
But hang on a minute. What if this narrative is all wrong? What if instead of trying to “break down” silos, banking innovators would stand a better chance of success if they tried to connect them? Well, before we get carried away with a lightbulb moment, let’s examine some of the very real issues silos cause.
Firstly, there are problems with communication. Banks with many isolated departments can struggle to gain a full understanding of customers’ overall financial health due to ‘data silos’. Research suggests this lowers data quality, costing businesses an average of $13 million a year.
Secondly, operating in silos can lead to duplication of effort, with teams developing similar products and services. The result is resource wastage and stilted progress in innovation.
A good example of such waste occurs in product testing. We’ve seen instances where individual departments within banks have purchased their standalone simulators. Not only can this be incredibly expensive, but it also risks interoperability issues when attempting to conduct tests across silos.
Against a backdrop of such challenges, many commentators, understandably, have called for the breaking down of silos. After all, this seems like the most logical way to combat the inefficiencies they cause, speed up innovation and save time and money.
However, in Iliad’s experience, following the path of least resistance tends to be more productive. Regarding the behemoths that are global financial institutions, it’s far better to work with them than attempt to change their internal landscape.
From a testing perspective, this means finding ways to help connect the silos. The business case for such an approach is bolstered by the fact that financial transactions now pass through many departments, touching different types of legacy technology.
Consequently, developers are under more pressure than ever to communicate, collaborate and conduct strategic tests to multiple endpoints within a financial institution. It’s not hard to see how standalone simulators create problems, slow innovation and weigh on the bottom line.
A solution that is agnostic about differences in departmental technologies while giving teams the ability to view the entire process across silos feels like a better way forward. This way, no one has to ‘rip and replace’ platforms. Instead, they’re empowered to test faster without compromising safety or quality.
Additionally, organisations should be able to reuse and automate tests and assets throughout the development process, enabling developers to address issues quickly.
As strategies go, connecting silos rather than breaking them down is proving appealing to large financial institutions. Thanks to open banking and digital currencies, the market is becoming ever more complex. And there’s a growing need for technologies that work seamlessly everywhere – within a single organisation or between a range of organisations in the wider ecosystem.
On that note, perhaps it was never the silo that was the problem; it was simply our approach.
Read more about Iliad Solutions
The Payments Association
St Clement’s House
27 Clements Lane
London EC4N 7AE
© Copyright 2024 The Payments Association. All Rights Reserved. The Payments Association is the trading name of Emerging Payments Ventures Limited.
Emerging Ventures Limited t/a The Payments Association; Registered in England and Wales, Company Number 06672728; VAT no. 938829859; Registered office address St. Clement’s House, 27 Clements Lane, London, England, EC4N 7AE.
Log in to access complimentary passes or discounts and access exclusive content as part of your membership. An auto-login link will be sent directly to your email.
We use an auto-login link to ensure optimum security for your members hub. Simply enter your professional work e-mail address into the input area and you’ll receive a link to directly access your account.
Instead of using passwords, we e-mail you a link to log in to the site. This allows us to automatically verify you and apply member benefits based on your e-mail domain name.
Please click the button below which relates to the issue you’re having.
Sometimes our e-mails end up in spam. Make sure to check your spam folder for e-mails from The Payments Association
Most modern e-mail clients now separate e-mails into different tabs. For example, Outlook has an “Other” tab, and Gmail has tabs for different types of e-mails, such as promotional.
For security reasons the link will expire after 60 minutes. Try submitting the login form again and wait a few seconds for the e-mail to arrive.
The link will only work one time – once it’s been clicked, the link won’t log you in again. Instead, you’ll need to go back to the login screen and generate a new link.
Make sure you’re clicking the link on the most recent e-mail that’s been sent to you. We recommend deleting the e-mail once you’ve clicked the link.
Some security systems will automatically click on links in e-mails to check for phishing, malware, viruses and other malicious threats. If these have been clicked, it won’t work when you try to click on the link.
For security reasons, e-mail address changes can only be complete by your Member Engagement Manager. Please contact the team directly for further help.
