Decisions > Diligence: Dynamics of Decision-Making in Banking
Digest
This podcast explores the slow decision-making processes prevalent in financial services, contrasting them with the agility of fintech partnerships. CoreBank and Cobalt Labs share their successful collaboration, highlighting how clear problem definition, early and effective proofs of concept (POCs), and strong leadership alignment accelerated their partnership. The discussion emphasizes the importance of understanding the core business need, streamlining the buying process, and the strategic value of timely implementation. It also offers advice for startups on navigating bank sales cycles and for banks on breaking detrimental decision-making habits, advocating for a focus on outcomes and shared accountability.
Outlines
The Challenge of Slow Decision-Making in Financial Services
The financial services industry is characterized by slow decision cycles due to extensive diligence and risk reviews. This caution can lead to paralysis, where risk management becomes an aversion to decision-making, potentially increasing risk by avoiding feedback. While trust and compliance are crucial, the industry struggles to balance speed with necessary caution.
CoreBank and Cobalt Labs Partnership: A Case Study in Accelerated Decisions
Lindsey Borgensen from CoreBank and Kalyani Ramagadhan from Cobalt Labs discuss their partnership, which formed faster than expected. They share insights on what smoothed the decision process, including Cobalt Labs identifying CoreBank through industry events and CoreBank's reputation for innovation. Kalyani explains Cobalt's "feel the value" approach through POCs using client data, and Lindsey highlights CoreBank's intentional approach to innovation by being purposeful about their mission and defining problems clearly.
Streamlining the Buying Process and Strategic Implementation
The conversation emphasizes the importance of clearly understanding the problem to be solved, preventing endless demos and leading to better decisions. CoreBank focused on solving the core business need—delivering at speed and scale—prioritizing this over lengthy RFP processes. Making decisions sooner is crucial to avoid perpetuating problems. CoreBank strategically planned to implement Cobalt before their 2026 roadmap to avoid hiring additional staff, justifying the urgency and allowing subsequent initiatives to proceed quickly.
The Power of Proof of Concept and Stakeholder Alignment
A successful proof of concept (POC) triggered the decision to move forward, with key stakeholders, including the Chief Risk Officer, bought in. This strong leadership alignment smoothed the contracting and implementation process. The Chief Risk Officer's dual role in protecting the bank while driving growth was vital. Kalyani explains the POC's goal was to build trust by allowing CoreBank to experience the value firsthand, addressing potential skepticism. Cobalt's sales philosophy centers on letting clients experience value through POCs, building trust more effectively than pitching capabilities. Kalyani advocates for early POCs to determine viability, rather than pushing for immediate purchase.
Best Practices for Effective Proofs of Concept and Post-POC Decisions
Meaningful POCs should directly address the core problem being solved, not just technical feasibility. Cobalt's lightweight implementation and ability to emulate processes with sample data contribute to their successful POCs. After a successful POC, the next steps involve packaging results, aligning on a business case, and discussing timelines, avoiding pressure on the client. CoreBank's preparedness post-POC, with clear requirements and expectations, streamlined the launch. Failures often occur post-implementation due to lack of support or failure to realize ROI, emphasizing the importance of walking the "last mile."
Improving Decision-Making: What Banks Should Do and Stop Doing
Choosing the right implementation partner depends on internal capacity and desired customizability. Clear understanding of roles and responsibilities is vital. CoreBank excels at good decisions through leadership alignment, clear purpose, and focusing on the problem. Banks should stop chasing "shiny balls," analyzing decisions to death, and seeking perfection, accepting that data can be sufficiently right to move forward. CoreBank has shifted away from consulted-but-not-accountable roles, fostering shared responsibility. Organizations must break habits like seeking consultation without accountability and align on strategic priorities to prevent disruptive issues. Asking unanswerable questions hinders decision-making; recognizing when a decision is sufficiently informed is key.
Startups Rethinking Sales: Patience, Understanding, and Partnership
Startups need to balance urgency with patience, understanding bank timing, budget cycles, and incentives. Impatience is counterproductive; collaborative problem-solving is more effective. Startups should avoid being annoying or spammy, focusing on understanding needs and exploring partnerships collaboratively. Fintechs must understand a bank's priorities; if a solution isn't high on their list, badgering is ineffective. Partnership is a long-term commitment, requiring mutual understanding throughout the process for successful collaborations.
Keywords
Financial Services Sales Cycle
The duration and complexity of the process involved in selling financial products or services, often characterized by lengthy diligence and risk reviews.
Decision Paralysis
A state where excessive caution or fear of making the wrong choice prevents any decision from being made, leading to inaction.
Fintech Partnership
Collaboration between financial technology companies and traditional financial institutions to leverage innovation and scale.
Proof of Concept (POC)
A small-scale test to verify the feasibility and potential value of a proposed solution, allowing clients to experience its capabilities.
Risk Management in Banking
The process of identifying, assessing, and controlling threats to an organization's capital and earnings, influencing decision-making speed.
Startup Sales Process
The methodology startups follow to sell products/services, often requiring adaptation to complex sales cycles of larger organizations.
CoreBank
A financial institution or technology provider focused on core banking systems, known for innovation and partnerships.
Cobalt Labs
A company providing solutions for financial institutions, known for demonstrating value through proofs of concept.
Leadership Alignment
Ensuring that key stakeholders and decision-makers within an organization are in agreement and support a particular course of action.
Problem Definition
The process of clearly identifying and articulating the specific issue or need that a solution aims to address, crucial for effective decision-making.
Q&A
Why is the sales cycle in financial services notoriously slow?
The sales cycle in financial services is slow due to legendary diligence, constant risk reviews, and the high stakes involved in handling money and ensuring compliance, often leading to decision paralysis.
How can organizations overcome decision paralysis in financial services?
Overcoming decision paralysis involves clearly defining the problem, ensuring leadership alignment, focusing on purpose, and accepting that decisions can be made with sufficient, not necessarily perfect, information.
What makes a Proof of Concept (POC) effective in the fintech sales process?
An effective POC allows the client to experience the solution's value firsthand using their own data, directly addressing the core problem and being conducted early enough to validate potential before commitment.
What should startups stop doing to improve their sales process when selling to banks?
Startups should stop being impatient and pushy, understanding bank timing and priorities, and instead focus on collaborative problem-solving and demonstrating how their solution fits strategic goals.
How did CoreBank and Cobalt Labs achieve a faster-than-expected partnership?
The partnership moved quickly due to CoreBank's clear problem definition, Cobalt's effective POC using CoreBank's data, strong leadership alignment, and a strategic approach to implementation.
What is the significance of the Chief Risk Officer's role in evaluating fintech solutions?
The Chief Risk Officer balances protecting the bank from risk with driving business growth, ensuring solutions are evaluated for compliance, security, and their potential to enhance business operations.
Show Notes
In This Episode
The length of the sales cycle in financial services is legendary. Slow decisions, endless diligence, and constant risk reviews are practically an industry meme. To be fair, the stakes are real. When money moves, it has to arrive; when deposits sit in a bank, they have to be safe. Somewhere along the way, caution turned into paralysis. Banks ask more questions, add more steps, delay commitment, often increasing the risk by avoiding learning, accountability, and real-world feedback.
In this episode of Breaking Banks, Jason Henrichs connects with Lindsay Borgeson, President of Core Bank’s Partner Banking Division, and Kalyani Ramadurgam, CEO and Founder of Kobalt Labs. They discuss the dynamics of decision-making in banking, the importance of defining the problems to be solved, the role of proof of concepts, and the hurdles of implementation. By sharing the Core Bank and Kobalt Labs partnership journey, Lindsay and Kalyani offer practical strategies for navigating these processes more effectively.
For financial institutions, speed doesn’t require cutting corners. For fintech providers, strong partnerships can be built by proving value early and enabling clients to make decisions based on real operational impact.
Whether you are a financial institution seeking to modernize your technology stack or a fintech company looking to accelerate enterprise adoption, this conversation offers experience-based guidance for making faster, high-confidence decisions without sacrificing risk discipline.
Listen now, share with your colleagues, and please reach out to share your feedback.
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