How Composability Helps Banks Reimagine Operational Efficiency and Agility

Imagine creating a credit card product in a matter of days, from idea to execution. Or acquiring 100,000 new banking customers in 10 days. Or digitally onboarding 90% of your customer accounts with no manual intervention.

It’s not a daydream. It’s actually happening in some banking organizations today.

In a recent Forbes article, I explain how banks are doing it by rethinking technology standards and adopting a composable decision intelligence ecosystem—an approach that connects data, insights, and actions across the enterprise to drive improved operational agility, visibility, and productivity.  

This article probes deeper into the concept of composability, examining what it means and how it operates within an AI decisioning platform to dissolve internal barriers and inefficiencies so banks can reach the real point of value: the hundreds of thousands of in-moment, hyper-personalized decisions that move their business and their customers forward.  

So, what is composability?

Remember those old-school wooden building blocks that came in different shapes and sizes? One kid might use the blocks to build a house, while another might use a different mix of those blocks to build a barn or an airport. Well, that’s an oversimplified explanation of composability.

According to Gartner, “Composable business means creating an organization made from interchangeable building blocks. The modular setup enables a business to rearrange and reorient as needed depending on external (or internal) factors like a shift in customer values or sudden change in supply chain or materials.”

These building blocks include digital data assets such as data sets, data features, data objects  and decisioning assets — predictive models, rules, scores, and algorithms — from different functional departments throughout the bank. Think things like affordability calculations, risk scores, attrition grades or measures of lifetime value and increasing or decreasing financial wellness. Instead of keeping these building blocks siloed or restricted for departmental use only, a composable enterprise can share them across the business with a unified, applied intelligence platform. Marketing, origination, risk, fraud, and other teams can create new data sets and analytic assets and securely expose them to the business so that other teams can piggyback off their work by reusing, modifying, or repurposing it for different applications.

Ultimately, composability is enabled by an API-first, microservices architecture that ensures all components — i.e., building blocks — work together, and provides the flexibility to orchestrate unique configurations for different use cases. 

It’s the future of banking, according to some.

The concept sounds great in theory, but can composability really work in banking? You bet, and here are a few examples.

• Consider a transactional use case that requires an automated decision in milliseconds, with no human intervention. Let’s say an automated decision for peer-to-peer payments fraud detection. Since the goal in a transactional use case is to optimize the efficiency of the transaction, the composition will be geared towards lower latency and higher throughput.
• In the case of loan originations, a human workflow may be required to make a decision. This type of human-centered workflow must enable humans to interact and provide input. This use case requires a different approach to composability that integrates manual interventions with automated process. In this case, Business Process Management (BPM) is appropriate.

Other forms of composability include service orchestration, dataflows, as well as combinations of different techniques. What’s important to know is that different situations and requirements demand different approaches to composability. For banks, this means having a robust technology foundation with modular yet interoperable capabilities that can support myriad use cases.

As Anne Boden, founder and CEO of Starling Bank, put it in a recent article, “Composable banking is the future of banking. It enables financial institutions to offer customers a highly personalized and tailored experience, while also being able to iterate and improve at speed. With the right technology, banks can easily plug and play services, creating a truly customer-centric ecosystem.”  

Unlock increased innovation and ROI.

With composable banking, you’re essentially building once and then sharing, connecting, and reusing your data and digital assets in new ways to innovate, problem-solve, and achieve a range of outcomes. It’s smart, efficient, and a great way to get more mileage and a better return on your technology investment. Other big benefits to banks can include:

• Faster time to market. With direct access to a veritable menu of existing digital data and decisioning assets from across the business, there’s often no need to start from scratch, which means banks can deploy new decisions, scorecards, models, and use cases in less time.
• Accelerated pace of innovation. Sharing a deeper understanding of customers and banking operations across the organization can spark inventive collaboration, enable experimentation and drive faster development of tantalizing new products, packages, bundles and offers that put customers — and their financial health — at the center of the business.
• Improved responsiveness and business-user empowerment. Giving business users modular access to enterprise-wide data and services empowers them to intelligently make real-time, “plug-and-play” adjustments to products and strategies in response to market changes.
• Increased productivity. Exposing digital assets and sharing them with other functional teams increases digital efficiency and boosts productivity by reducing compute costs lost to duplication, especially when multiplied across millions of customers.

Scaling composability within an AI decisioning platform.

A good place to begin (or accelerate) the journey toward composability is with a unifying decisioning platform, such as FICO Platform. Purpose-built to support organization-wide composability at scale, it helps banks optimize their existing resources by using:                                                       

• A flexible, cloud-independent deployment approach for a wide range of services from existing workloads from microservices, streaming data services, machine learning applications and more, which helps to quickly scale existing architecture and provide improved composability. 
• An open, API-driven, event-based architecture supporting decomposition into independently managed and scaled services. This means banks can quickly and easily introduce new features and services to meet customer needs.
• Authoring tools oriented to business users, which allow subject matter experts to create, test and deploy powerful new applications without technical distraction. This helps organizations quickly spin up sophisticated business applications more easily.

Using this inclusive, business-enabling approach, banks can move at the pace of their customers and the larger market. They can better analyze and understand customer needs. They can embrace AI-powered automation to trigger more personalized, customer-first actions. And they can acquire the analytic acumen and agility required to adapt to today’s fast-changing world. 

Composability is one of many capabilities available within FICO Platform. Collectively, these capabilities can help banks employ and operationalize data-driven decisioning and AI, while streamlining how they access, analyze, and apply intelligence across the customer lifecycle.

Get to the decision, faster.

Beyond the tech-speak about platforms and composability, banks want to know one thing. Can it help them make better decisions faster, in a highly fluid marketplace? Specifically, the daily, needle-moving decisions that impact all areas of their business, including product development and pricing strategies, origination and onboarding, next-best customer offers, fraud mitigation, compliance, and more.

Here's a look at the transformative impact it can have on bank decisioning.

• Personalized customer decisions. By giving business users (who best understand the bank’s policies, processes and customers) fine-grained control over business logic, banks can eliminate inefficiencies and guesswork, craft hyper-personalized experiences and automate the best decisions and treatments across the customer lifecycle. In the words of a FICO banking customer, "We knew that by harnessing the latest AI and advanced decision analytics we could create an experience that would beat customers’ expectations and ensure they were treated as an individual."
• Smarter, faster operations. Reusing existing data and decision assets such as attributes, models and algorithms across the banking enterprise is a big productivity boost and promotes alignment, while stepping-up innovation and time-to-market. Here’s how a FICO enterprise bank customer characterizes the shift from a traditional technology architecture to a composable, platform environment: “Everything about our legacy application was completely incompatible with modern-day integration patterns or even the way that the data was received and what we could do with it in decisioning. It’s really like comparing steam engines to electric cars.”  Learn more about the FICO Platform Composition & Orchestration Capability.
• Optimized communications. A composable, AI-fueled approach enables banks to automate tailored customer messaging over their preferred channels, throughout the account lifecycle spanning onboarding, originations, risk and fraud, customer management, collections, and even compliance. As an example, one FICO banking customer sought to achieve a digital, omnichannel capability that would support 24/7 access to its distressed customers in their time of need. The strategy resulted in a 26% reduction in call center effort, with no reduction in its customers’ payment performance.  
• Better user experiences. User experiences are where the rubber meets the road. From platform integration and user interface authoring to dynamic case management, banks can easily mix and match proven components to thoughtfully create front-end solutions and curate real-time customer moments. They can tap AI and decisioning horsepower to further amplify those moments and offer more personalized experiences for every interaction, in turn, sparking smarter, faster, and more profitable decisions at scale.

I’ll end with this eye-opener. Despite soaring demand for composability and its high potential in banking, a Gartner CIO survey reveals that only 7% of financial firms exhibit high levels of business composability. For the remaining 93%, consider moving toward more modern, collaborative, and agile banking operations, instead of acting on antiquated technology standards, siloed data, and disparate systems.

By leveraging a composable AI decisioning platform, banks can build a synergistic technology framework that drives improved operational efficiency and intelligence, and more nuanced decisioning processes that seamlessly cater to the individual needs of their customers and today’s fast-changing market.

How FICO Platform Can Help Your Enterprise

• Read the news release of FICO Platform.
• Watch FICO Platform in action with the story of your everyday consumer, Digital Jane.