Saab, yes, the car company, has seen quite a bit of turmoil over the last few years. First, there was the takeover by GM and then more recently the sale to Spyker, a Dutch sports car manufacturer. Then, lately there was an announcement that for their new 9-3 model they will be using BMW engines. Now, being a long-term Saab driver, I was quite shocked.

Really, BMW engines in a Saab?

Now, that is like, say, First Direct selling a Santander product.

Crazy! Or is it?

However, thinking about it, although their cars don’t look like much, BMW does make excellent engines and if it keeps Saab making cars for their customers, well, maybe after all it’s not such a bad idea.

Of course this kind of thing has been going on for quite a while in the car industry. The product organisation within a car company builds the car from a variety of components sourced from a realm of suppliers. Each supplier specialises in its own components. It would be impossible for a car manufacturer to do all this by themselves and certainly impossible to do it within acceptable time frames. The sales organisation then is free to tailor that product to the wishes of the customer. When you go to a car dealership you don’t buy the car that has been designed by the manufacturer, no, you choose the colour, the tyre size, the type of engine and a host of other options that in the end provides you with a verhicle tailored to you.

So let’s get back to banking. First Direct selling a Santander product.

Why not? We already have banks that provide custody services, clearing and settlement services, payment services, etc. Breaking up the value chain in banking opens the opportunity for banks to focus on doing the things they excel in. For some this is building core products, for others, it’s assembling those core products in a compelling customer proposition.

In a general drive towards building a custody service, First Direct is launching the “Beta Lab scheme” to celebrate its 21st birthday. This will give customers and members of the public a chance to have their say on how new products and services are developed, and the opportunity to give feedback prior to launch, all this online.

In order to be able to do this, banks of course, need to have a core system that is highly modular. A system that embraces componentisation and a Service-Oriented-Architecture.

I’m still mad about the Saab thing though but for another reason. The Swedish government didn’t step in to help Saab and keep this national icon intact. It seems the banking sector is more flexible about this, seeing the number of times governments have stepped in to save banks over the last years. Although by nature, banks can hardly be described as iconic but let’s hope the banking sector will take this opportunity to progress, innovate and provide great customer service.