This is the sixteenth installment of the "Letter from the Editor," a biweekly series of exclusive insight and opinion-driven analysis from Tearsheet’s Managing Editor, Sara Khairi. This series connects ideas, questions assumptions, and tracks fundamental shifts across both mature and emerging trends in financial services.
The Product Evolution at Tearsheet
At Tearsheet, we have spent years chronicling the digital transformation of the financial sector. However, this year, we decided to practice what we preach. Zack Miller, our Editor-in-Chief and co-founder, has taken on a dual mandate: he remains the editorial voice of our organization while stepping into a dedicated product role.
This internal shift mirrors a broader, more critical transition occurring across the global banking landscape. As we refine our own product strategy, we have spent considerable time dissecting how legacy financial institutions—and agile fintechs—conceptualize, build, and iterate on their own digital offerings. The findings are sobering: while the vocabulary of "product management" has permeated the boardroom, the execution often remains trapped in the legacy architecture of "project management."
The Core Problem: IT Projects vs. Living Products
For decades, banks have operated on a project-based lifecycle. A feature is conceived, a budget is allocated, a timeline is set, and the "project" is delivered. Once the code is deployed and the box is checked, the team often disperses, moving on to the next initiative.
This model is fundamentally at odds with the modern digital economy. As Zack Miller discussed earlier this year with Anthony Ianniciello of Q2 and Trisha Price of Pendo on the Tearsheet Podcast, many financial institutions continue to manage digital experiences as IT-driven technical requirements rather than as living, breathing products built around customer outcomes.
When a bank treats a mobile banking app update as a project, they ignore the most vital component of success: the feedback loop. Products are not static artifacts; they are reflections of how a company’s systems, data, and internal culture harmonize to solve a specific human problem. If a product is treated as something with a clear start and end date, it is destined to become obsolete the moment it hits the app store.
The Expanding Definition of "Product"
The meaning of "product" in financial services has undergone a radical expansion. It is no longer just about the interface or the specific transaction capability. It is about the holistic journey.
Consider the user experience of a small business owner. They do not wake up in the morning hoping to "use a bank portal." They wake up needing to solve business problems: Have my invoices been paid? Do I have enough cash flow to cover payroll this Friday? Are my vendor payments scheduled?
When a bank provides a tool that only shows an account balance, it is offering a feature. When it provides a dashboard that contextualizes cash flow, suggests payment timelines, and alerts the user to potential liquidity gaps, it is offering a product. The product is the solution to the task; the feature is merely the mechanism.
Chronology: The Shift from Siloed Infrastructure to Customer-Centricity
To understand how we arrived at this crossroads, we must look at the recent evolution of financial technology:
- 2010–2015: The Digital Window Dressing Era. Banks focused on digitizing existing paper processes. The goal was to provide "online" versions of branch services. The product mindset was secondary to the goal of cost-cutting through self-service.
- 2015–2020: The API and Fintech Boom. The rise of BaaS (Banking-as-a-Service) and open banking forced incumbents to reconsider their infrastructure. Products began to be modularized, but organizational structures often remained siloed.
- 2020–2023: The Pandemic Acceleration. The sudden necessity of 100% digital engagement exposed the fragility of "IT-project" banking. Institutions that lacked a product-first culture struggled to iterate during a period of massive consumer behavioral change.
- 2024–Present: The Era of Product Maturity. The current focus is on "outcomes." Firms are now realizing that data-driven insights must dictate product roadmaps. This is the era where the product manager has become as critical to a bank’s success as the chief risk officer.
Supporting Data: Why Mindset Matters
The evidence for a product-first approach is not merely anecdotal. According to recent industry benchmarks, banks that prioritize product-led growth (PLG) strategies report:
- Lower Cost of Acquisition: By solving specific customer pain points, institutions can rely on organic growth rather than expensive marketing campaigns.
- Higher Retention Rates: Customers who engage with a product that solves a functional problem are significantly less likely to churn compared to those who use a bank for purely transactional purposes.
- Faster Time-to-Market: By utilizing agile development cycles rather than waterfall project management, product-focused teams can ship updates in weeks rather than months, allowing them to adapt to competitive pressures in real-time.
However, the "IT-first" trap remains. Research indicates that over 60% of large financial institutions still allocate budgets based on annual project cycles. This budget rigidity creates a "dead zone" where product teams are unable to pivot quickly when customer data suggests that a feature is failing or that a new need has emerged.
Official Perspectives: What the Experts Say
In our conversations with leaders at Q2 and Pendo, the consensus was clear: the bottleneck is rarely technology; it is culture.
"When you build a feature, you’re looking at a requirement document," says Trisha Price. "When you build a product, you’re looking at a customer’s life."
The implication is that banks must reorganize their teams around customer journeys rather than product lines. Currently, most banks have a "Checking Account Team" and a "Loan Team." This structure forces the customer to bridge the gap between these silos. A product-first institution would instead have a "Small Business Cash Flow Team," which might touch both checking and lending data to create a unified experience.
Implications for the Future
What does this mean for the future of financial services? We are moving toward a period of extreme consolidation and differentiation.
Banks that refuse to abandon the project-based mindset will increasingly find themselves relegated to the status of "dumb pipes"—infrastructure providers that facilitate transactions but own none of the customer relationship. Fintechs and forward-thinking incumbents will own the product layer by embedding themselves into the workflows of their users.
For the product manager in the banking sector, this is a call to action. It is no longer enough to manage a backlog of Jira tickets. You must become a translator—taking the complex, messy reality of bank data and legacy systems and distilling it into a simple, coherent experience that helps a customer achieve a goal.
Conclusion: The Perpetual Iteration
The most successful products of our time—the ones that have fundamentally changed how we live—were never "finished." They were constantly refined. Whether it is a social media platform or a mobile wallet, the companies behind these products view their work as a perpetual cycle of learning, measuring, and building.
At Tearsheet, our own transition into a product-first editorial organization has been humbling. It forces us to ask: Is this article a project, or is it a product? If it’s a project, we publish and move on. If it’s a product, we watch how you read it, we listen to your feedback, and we evolve the next issue to be more useful than the last.
Banks must ask themselves the same question. Your digital banking app is not a project that was completed in 2022. It is a product that, if managed correctly, should be significantly different—and more valuable—tomorrow than it is today. The era of the "launch and leave" approach is over. The era of the product-first bank has begun.
