SANTANDER UK
TECHNOLOGY CAN UNDERPIN FIRST PRINCIPLES IN BANKING
First Principles Thinking is an idea recently popularised by entrepreneur Elon Musk – although it dates back to the philosopher Aristotle who defined it as ‘ the first basis from which a thing is known ’.
Musk describes First Principles Thinking as “ you kind of boil things down to the most fundamental truths … then reason up from there .” This is what inspired his quest to send the first rocket to Mars – an idea that would become the aerospace company SpaceX . can carry and sell more produce , pay off their loan , and buy a car . The intermediation that enabled that lending , helps them to scale very quickly .”
“ I don ’ t think we should forget how fundamental and important banking is to our economies and our job is to do that task as well as we possibly can . Creating the money supply is a powerful and significant responsibility . Technology can make that task possible in a way that ' s better than it ' s ever been performed .”
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Holman says it is important to think about the First Principles of banking when it comes to applying new technology .
“ The basic banking system and intermediate takes those in the economy who have got money and lends it to someone who needs money . For example if someone is selling produce at a market they can get a loan to buy a bike and then they
“ If we choose to stick to the First Principles of effective banking , understand them and then choose the right technology to help us do them efficiently and quickly , with customer understanding , with context , with the right risk appetite and the right level of profit that is sustainable for our industry and the economy , I believe banking can do some powerful and amazing things and technology can help underpin that .”
58 May 2021