The Minimal Viable Bank concept

In today's dynamic and unpredictable world, where economic fluctuations and unforeseen events are commonplace, the concept of a Minimal Viable Bank (MVB) is gaining traction among new market entrants, financial services executives from legacy providers and regulators. This innovative approach offers a path towards building resilience and ensuring continuity in the face of challenges.

The MVB concept encompasses two distinct but interconnected aspects which include:

• Initially proposed as a means to provide essential banking services to underserved communities, the MVB focuses on a limited range of products and services
• By leveraging technology to automate processes, MVBs can operate with lower costs and serve customers more efficiently
• This makes banking more accessible and affordable for individuals and businesses who may have been excluded by traditional banks

• From a resilience perspective, the MVB is designed to withstand financial shocks and maintain service continuity
• This is achieved by focusing on core operations, critical infrastructure, and essential data, ensuring that the bank can continue to function even in the face of disruptions
• By prioritising customer trust and operational stability, the MVB can navigate catastrophic scenarios and emerge stronger

A MVB concept that proposes a banking model designed for both efficiency and resilience should consider is strategic operating model, leverage technology to automate processes, and minimise operational costs. MVBs can achieve greater agility and responsiveness that includes the following considerations.

• Identifies and prioritises the most critical or important functions and services, such as secure deposits and savings accounts, risk-mitigated loan products, payment systems, and low-risk investment options
• Includes technologies and delivery partners that support the above services, streamlining recovery, and deploying personnel to quickly resume operations after a failure event
• Considers cloud-based solutions for "bare-metal" data and infrastructure restoration, combining contractual provisions with suppliers alongside hot and cold site disaster recovery contingency plans
• Deploys enhanced cybersecurity/privacy measures and data analytics for risk reporting to assure secure transactions
• Includes a core MVB team comprising business leaders, operational, legal, human resources, cyber, and resilience experts who understand the transition plan and new operating model

• Ensure Impact Tolerances are used to initiate the move to a MVB state
• Regularly stress test and evaluate the bank's response to hypothetical scenarios
• Dynamically utilise compliance frameworks that can adapt to new regulations during new operational models
• Demonstrate advanced cyber, privacy, and risk management systems to identify and mitigate potential threats
• Utilise runbooks and communication plans for customers, regulators, the press, and employees in the event of an MVB deployment

• Uses transparent policies that inform customers about the bank's stability measures
• Creates educational resources to help customers make informed financial decisions in the new operational model
• Provides a highly responsive customer service that leverages AI chatbots and human responses, even during crises
• Develops a strong brand messaging that highlights the bank's stability and reliability
• Builds a community engagement platform for customer communication and insights
• Creates an enhanced crisis communication plan to keep all stakeholders informed during disruptions

A resilient Minimal Viable Bank is not just about offering the bare minimum; it's about delivering essential banking services with a focus on stability and security. By prioritising core services, leveraging cutting-edge technology, and maintaining a flexible business model, a MVB can stand firm against operational disruption.

This approach can also help explore opportunities by testing new propositions in the market, targeting new segments, or competing with challenger banks. Finally, remember, resilience is not just a feature—it's a promise to customers that their financial well-being is a top priority. With careful planning and a commitment to resilience, a MVB capability can become a competitive advantage.