Making the most of what you know – and what you don’t
Donald Rumsfeld, former US Secretary of Defense, famously drew ridicule for saying: ‘As we know, there are known knowns – there are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know.’
At the time it caused confusion. Not because what he said was idiotic – on the contrary: it made perfect sense, triggering a sense of alarm at the vast expanse of unknowns. But beyond fear, what is the power of recognising the ‘known unknowns’ today?
As the industry adjusts to the new world of open banking, Rumsfeld’s words have never been more relevant. Those who come out on top post-PSD2 may well be the ones who identify what, for their business, are the ‘known knowns’ and the ‘known unknowns’ – and develop a strategy for monetising both.
What are your known knowns?
Think about what your bank excels at. Over the years, what have you developed a deep understanding and mastery of? Are you the market leader for small businesses? Do you have the best offering for yacht loans? Think hard about why this is. What is core to your value proposition? What value do you bring to this that no one else can match? What do you know about this better than anyone else? Open banking brings an opportunity for you to elevate this ‘known’ to a strong differentiator; positioning yourselves as the first choice for this niche gives you the opportunity to leverage this specialism to attract new customers to your brand.
Identify known unknowns
There are many things about open banking we can’t know yet – especially as most of the current focus is on getting us ready for this world, not what it will be like to live in this world. Any progress in an industry brought about by technological advancement, legislation – or both – always has unforeseen consequences. Society always adapts, people’s expectations and behaviours change. We can’t know exactly what these changes will be, but we know there will be changes. These are the known unknowns. But what strategy do you employ to make the most of the known unknowns? Business must be agile. Agility doesn’t require monumental re-organisation, or multiple disruptive bets; but you need to be ready to act when an opportunity presents itself.
We can see how this plays out in the real world by looking at Netflix. What started out as a mail-order DVD service has repeatedly adapted and prevailed – evolving to downloadable films as the technology opportunities opened up, then to streaming films as consumers started demanding instant gratification. Then a ‘known unknown’ came to pass as, predictably, the film studios reacted to their audiences’ new expectations and behaviour. Netflix quickly identified the risk of the film studios licensing their content to other streaming services, and started to develop its own films and shows. If it held fast to its original offering of mail-order DVDs, much like Blockbuster persisted with video rental service, Netflix would be a thing of the past.
So, who will make the most of the known knowns and known unknowns of open banking? Well, that’s one of the best known unknowns of them all.