We’ve been living the future for nearly 20 years.
Let me take you back to the year 2004 as we thumb through the pages of a new book from psychologist Barry Schwartz called The Paradox of Choice: Why More Is Less. Backed by research, Barry’s premise was simple: While some choice is better than no choice at all, too much choice can be even worse, leading to all sorts of misery, namely …
Analysis Paralysis: If you’re given a thousand options and you’re expected to choose just one, the effort can be so mentally exhausting, you end up not choosing at all.
Anticipated Regret: Also known as buyer’s remorse, if you finally do make a choice, you may be haunted by the possibility that you really didn’t make the best choice.
Escalation of Expectations: If you put in all that effort to choose, you’re going to expect a great choice. But what if you only make a good choice? You may come to look on your good choice as a bad choice.
It all makes sense … to a point.
Netflix: The Case Study
A mere three years later, Netflix launched its streaming service and the world changed forever. Eventually, Netflix came to be seen by people smarter than I as proof-positive of Barry’s paradox. They even coined the term “Netflix Syndrome,” where you spend an hour scrolling and clicking and reading descriptions, but never watching, instead giving up in frustration and hitting the sack.
I dunno. Is that really the user experience that 250 million+ people are paying anywhere from $8 to $25 or more a month to “enjoy”? Maybe Netflix Syndrome was a thing 15 years ago, but I believe that people have become accustomed to having a seemingly infinite number of choices. In fact, dare I say, they even expect it. With that thought in mind, I posit that Netflix is, in fact, a fully composable digital entertainment platform – a true pioneer in composability.
Can you see where I’m headed with this?
The Future of Core Processing
Composability is one of the hottest topics in core data processing – and with good reason. In an era when every tech vendor under the sun promises to “future proof” your credit union, a composable core truly delivers on that promise.
Although Mambu is new to the US credit union space, their composable core platform is already deployed globally in a wide range of financial institutions. Jack Henry is building its composable core, the Jack Henry Platform, from the ground up. And Fiserv is starting to figure out how its latest acquisition, Finxact, will play in the Fiserv ecosystem.
What’s the big deal about a composable core? Why are major players making this pivot?
Think of your legacy core as a Barbie Dream House. It’s big and it’s beautiful and it’s everything you’d expect a Dream House to be. But in a crowded market where the only thing you really have to offer is anything that differentiates you, why would you want the same Dream House as every other Barbie in town?
Now think of the composable core as a LEGO set. You start with an empty baseplate and then build it out any way you see fit. If you’re really ambitious, you can grab a handful of bricks and get down to business. Or if you prefer, you can buy a predesigned rocket ship, knowing it will snap right into place on that LEGO baseplate.
The point is, a composable core gives you back (assuming you had it at some point) your technological sovereignty. You can architect exactly the core platform that you and your specific members need – a unique environment that wouldn’t be right for any other credit union but yours. And if you need a new rocket later, just unplug the old one and go. That’s what I call future-proof.
The nifty thing is, you can begin to take advantage of a composable core without the pain and anguish of a full-blown core conversion. Because composable cores are built the way they are, you can deploy one in a so-called speedboat setting where you keep running your legacy core but rely on your composable core do handle all the cool stuff your legacy core can’t, the thinking being that eventually you won’t need the legacy core at all.
But …
Why Stop at Core?
Composable isn’t just a good idea for movie night and data processing. IMHO, it’s a good idea for technology in general.
In my worldview, a composable architecture is even more important for a digital banking platform. Think about it.
Composable technology lets you truly differentiate yourself, right? Who are you trying to differentiate yourself to? Duh. Your members. What’s the most common touchpoint for your members in 2026? Digital banking. So where is it most important to differentiate your credit union for members? Again, digital banking. BAM!
I Couldn’t Stop There
Just as I was basking in the brilliance of my newfound realization about composable digital banking, I got into a discussion with a fintechnologist about the future of AI. He contended that over time, the horizontals (Gemini, ChatGPT, etc.) would become so capable, the specialized vertical AIs would become obsolete. I countered that there would always be a need for specialized knowledge and experience that a general AI could never train on.
Later, while reflecting on that conversation, it hit me like a ton of LEGO bricks. That’s where AI is inevitably headed. Gemini and ChatGPT will evolve into composable AI platforms. They’ll serve as the AI baseplates onto which you can snap any specialized module you need. Double BAM!
There’s my prediction for this week. All technology will eventually become composable. You heard it here first.
Author’s Note: As I was wrapping this up, an image of a composable kitchen appliance popped into my head. Of course, I’m talking about my amazing KitchenAid stand mixer. But I’ll save that discussion for another time. And maybe another newsletter entirely.