Hello and welcome to Continuous Improvement, the podcast where we explore strategies, frameworks, and concepts to create compelling and memorable product experiences. I’m your host, Victor Leung. Today, we are diving into an exciting blog post that discusses the innovative core banking product developed by Thought Machine. But before we delve into the details, let me tell you a bit about this groundbreaking company. Thought Machine has recently raised a staggering $200 million in a Series C funding round, attracting industry-leading VCs and global banks. With its flagship product, Vault, Thought Machine is revolutionizing the banking industry by empowering banks to offer innovative services to their customers.

Vault, a cloud-native ledger platform, operates on various cloud services, offering unparalleled flexibility to banks. From real-time data transmission and rich data streaming for AI and reporting, to managing international currencies, cryptocurrencies, and reward points, Vault provides an augmented product experience that goes beyond just functionality.

But let’s take a step back and examine the different levels of this product. At the core is a modern banking platform, designed with an API-first architecture, allowing easy integration with services and technologies from other vendors. This is the actual product that meets the core needs of users. And finally, we have the augmented product, which includes features like a payments processing platform and the ability to run various retail banking products such as current accounts, savings, loans, credit cards, and mortgages.

Now, it’s time to understand the competitive landscape. We will explore the competition at various levels, including narrow, form, need, and substitute. By understanding these levels, Thought Machine can better position its product and stand out from the competition.

Moving on to niche evaluation, we’ll use Professor Alter’s four criteria for a strong niche. The global retail core banking market is estimated to be worth just over £6 billion. To identify individuals with a need for this product, channels such as marketing and accessible platforms will come into play. And lastly, the predictable behaviors of banks looking to compete and differentiate their financial products will contribute to a strong niche.

Next up is the friction audit. We’ll examine the different customer touchpoints and identify areas of friction that Thought Machine could alleviate. From the pre-purchase phase, which involves assessing risk, joining demo sessions, and decision making, to the purchase phase, which includes signing contracts, writing statements of work, and team formation, and finally, the post-purchase phase, which requires smooth product installation, clear product documentation, and reliable production support. By addressing these points of friction, Thought Machine can improve the overall customer experience.

Now, let’s talk about product innovation. The sweet spot for incremental innovation lies in fulfilling articulated needs for unserved customers and unarticulated needs for served customers. Thought Machine is targeting customer needs that include out-of-the-box core banking services, flexibility with an easy-to-use configuration layer, hosting options on both private and public cloud platforms, scalability, enhanced integration with other banking systems, improved reporting and data analytics, data protection and privacy, and operational resilience.

Finally, in the blog post, the author provides priorities and recommendations for Thought Machine to fully realize the potential of their product. These include focusing on narrow niches and leveraging platform flexibility, building an open-source integration library, conducting a friction audit, and offering a SaaS solution.

That wraps up our exploration of this fascinating blog post on Thought Machine’s revolutionary core banking product. I hope you found this discussion insightful. Thank you for joining me on this episode of Continuous Improvement. Remember, there’s always room for improvement, so keep striving for excellence. Until next time!