Bethan Timmins Equal Experts Alumnus

Our Thinking Thu 13th July, 2023

Four reasons ‘You Build It You Run It’ is crucial for highly regulated financial businesses

While ‘financial businesses’ can be quite broad—spanning insurance and superannuation companies, banks, fintech, investment firms, and more—there is one thing they all have in common. And it makes ‘You Build It You Run It’ an incredibly compelling proposition.

Whatever your focus as an Australian financial business, you’re regulated by APRA: the Australian Prudential Regulatory Authority

As a result, you have mandatory commitments to uphold around transparency and accountability.

In the years following The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, these commitments are being monitored with more intent than ever before.

The You Build It You Run It operating model makes it incredibly easy for financial businesses to meet those regulatory commitments.

How? By aligning perfectly with APRA’s remit, as defined in their very own statement of intent.

You Build It You Run It perfectly aligns with The Australian Prudential Regulatory Authority’s concerns and interests, making it easier and more cost-effective to meet your regulatory commitments.

At the same time, You Build It You Run It delivers a huge range of additional benefits for your organisation. This is achieved by ensuring your digital services are:

  • Highly available for customers
  • Capitalising on as much potential revenue as possible, and
  • Preventing inefficiencies or wasted cost within the business.

1. You Build It You Run It aligns perfectly with APRA’s focus and remit.

What is APRA’s remit?

Enforcing standards to ensure a ‘stable, efficient, and competitive financial system’.

This language is taken directly from APRA’s public statement of intent

The You Build It You Run It operating model perfectly complements each individual element of that remit. In the right context, it will make your organisation:

  • More stable.
  • More efficient.
  • As competitive as possible.

Before we touch on how, let’s take a moment to acknowledge the importance of auditing.

Many of APRA’s prudential standards require an Auditor to fulfil a range of responsibilities. 

You Build It You Run It involves high levels of automation throughout deployment. This is crucial to achieve the high levels of availability and deployment throughput that define it as an operating model. 

By virtue of these deployment processes being automated, your deployment pipeline is continuously logging information. 

In the You Build It You Run It operating model, you have real-time access to information on demand. This includes things like:

  • The number of successful deployments being made
  • When deployments are made
  • Who instigates each deployment
  • Who approves each deployment
  • And more.

In stark contrast, the traditional Ops Run It model requires manual creation of audit records. This larger level of manual effort takes time, development resources, and ultimately creates an inconvenient distraction from your main focus: delivering value to both customers and internal stakeholders.

With You Build It You Run It, many elements of your deployment pipeline are automated, logged, and trackable for any necessary audit functions.

By automatically tracking and logging this type of information, it’s much easier to align with APRA’s goals in auditing organisations: ‘to ensure a stable, efficient, and competitive financial system.’

Let’s see how that plays out in reality.

2. You Build It You Run It makes your digital services more stable.

In the context of digital services, APRA’s interest in stability is really about service availability

The key question is this: can a bank or payments provider serve their customers at all times? Or, conversely, what contingency measures are in place if the provider becomes unavailable? What happens when no one can withdraw their money? This scenario can be catastrophic. 

Banks need to be sure their technology is stable. And secure.

So, what is it about You Build It You Run It that contributes to service stability and high availability for customers?

  1. Teams are naturally incentivised to build proactive availability measures into services from the start, because the teams building the software are accountable for any incidents in production.
  2. Teams are encouraged to build and architect services that degrade gracefully in the event of an incident. This approach ensures business critical aspects of services are still available to serve customers in the event of a failure. 
  3. Teams are proven to improve time-to-restore after incidents, because they themselves built the code, and can identify and implement fixes faster.
  4. Teams automate their telemetry and change processes, which reduces the amount of risk associated with deployments. In turn, this contributes to higher levels of service availability.

3. You Build It You Run It makes you more competitive as an organisation.

It’s proven: continuous change and innovation at scale is the best way to increase return on investment for digital organisations. 

Launching new features to market rapidly and consistently is the best way to deliver and generate value. In a recent study published by Forrester and Equal Experts, one organisation was able to realise $41,000,000 worth of net present value by improving time-to-market.

The more you’re able to deliver new services or product features, the easier it is to differentiate yourself from competitors.

From APRA’s perspective, it’s suboptimal for every financial organisation to provide the same offering. This creates a scenario where there’s no real choice in the market.

From your perspective, you want to offer new products and services to capitalise on evolving customer needs, driving greater revenue and profit.

How exactly does You Build It You Run It make organisations more competitive?

It exponentially increases teams’ development throughput for a whole number of reasons:

  1. Unnecessary complexity is removed from the deployment process.
  2. Teams can streamline and automate testing and approvals processes.
  3. You Build It You Run It eliminates the need for time-intensive handoff processes and approvals gates. 

Perhaps hard evidence is the most compelling rationale here. Using the You Build It You Run It operating model, we’ve supported clients to go from 10 deployments per year to 4,000 per year, without a correlating rise in production incidents.

4. You Build It You Run It makes you more efficient.

Teams need to run in the most efficient way possible. Obviously, profitability is closely linked to your ability to minimise wastage within the business.

From APRA’s perspective, regulating for efficiency ensures your operating model is likely more sustainable. In turn, this prevents banks and financial businesses from falling over, or scenarios like bank runs.

Efficient organisations are also less likely to inflate prices for customers in an attempt to recoup the costs associated with inefficiency or wasted resources.

You Build It You Run It improves your efficiency in a huge range of ways.

  1. As outlined in the point above, teams are empowered to deliver more value, faster, and more consistently.
  2. Changes become significantly faster to implement because one single team owns the entire deployment lifecycle. There’s no requirement for time-intensive handoffs or CAB meetings.
  3. You Build It You Run It fosters a learning culture; teams own all the information required to build and operate a specific digital service. Being less reliant on knowledge or contributions from other teams, they can move faster and make decisions quickly.
  4. You Build It You Run It is typically extremely cost efficient over time in terms of run costs. Learn more about how much it costs to implement the You Build It You Run It operating model.

So there you have it: four reasons You Build It You Run It is a crucial consideration for highly regulated financial businesses. 

If you’re interested in becoming more stable, more competitive, and more efficient in the way you operate, let’s set up a conversation to discuss your requirements.

Alternatively, keep an eye out for more insights into how your operating model can mitigate risk while delivering huge net-present value.