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The Goldilocks Approach to Buying Bank Technology

Banking

thepurposefulbankerPam Hannett, Banking Practice Director for Silverline, recently appeared on the popular podcast The Purposeful Banker hosted by Dallas Wells of PrecisionLender, alongside Bryan Lee, Director of Financial Services for Salesforce. Below are some takeaways from the discussion, click here to listen to the full podcast.

The episode discussed buying bank technology and the challenges and pitfalls banks may face when they approach buying technology. Is your bank too cautious, too ambitious, or are you doing it just right?

Too Cautious

  • Every year, banks undergo strategic planning which culminates in multiple projects across all divisions. Many of those projects include technology with high priorities. When a banking team gets to the point of agreeing to a project that includes technology implementation, the first integration they look towards is their core system provider. It’s the first place teams go to because they are already vetted and integration seems easiest when it’s something you’re already working with. When you stick with a core solution, you often feel like your due diligence is halfway there and the homework and research is mostly complete without taking that extra step to see what else is out there; you may be missing a rewarding alternative. If teams take a moment to step outside of the box they can be expected to find a more innovative solution. Look outside your typical scope and you will discover alternative solutions that can fit your needs and position you for flexibility in the future.
  • The marketplace is changing a lot, both in the regulatory sphere and the needs of what customers want and expect. While you can expect core providers to deliver regulatory compliance, it’s not always going to deliver what your customers need. Make sure you’re looking at both the front and back end of the bank. Banks tend to go with what’s comfortable and not what’s new and what can make them stand out to customers.

Too Ambitious

  • Getting too excited about becoming the most innovative bank in the industry can have downfalls. Oftentimes, you may be making changes without thinking of everyone else in the organization. Ask yourself, what departments does this effect and what potential challenges could those departments face because of change.
  • Technology changes are cultural changes. Ensure you have buy-in from the executive level down to the front line. Everyone needs to know what is changing, why it’s changing, and how it’ll be implemented and measured. It has to solve a solution to provide value. The core system can be the heart of the bank with technology solutions surrounding it to create a more seamless and simple integration.

Challenges to Consider

  • The department representing a bank isn’t always the department who will be using the technology, oftentimes they’re just the one implementing it based on the needs of the bank. Ask yourself the important questions being whether it’s a development project or a business process enhancement. Bring together the right people from top to bottom to ensure it meets the needs of everyone affected.
  • Sometimes inside of those teams, you’ll find turf defenders or people threatened by new technology who will question or diminish the need for change. In the past, there was a movement to build your own CRM however the demand to quickly adapt has disrupted that movement when customers are expecting features like mobile technology and high-end personalization. The complexity of these expectations has created a realization that there are experts out there who may have a more viable solution.
  • For cloud-based CRMs, there is still a little more apprehension because cloud solutions are still relatively new. Other apprehensions come from a shift in banking from being product driven to being relationship focused. It is a cultural change into being sales driven. You can’t rely on customers coming to you in this environment, you need to be more proactive.

The Key Takeaway: Just Right

The best way to ensure success in buying technology is to document how it should be done internally. You should:

  • Have a clear process to follow to continually evaluate and move forward in a rapidly changing environment.
  • Become more agile and responsive to how you acquire and deliver new technology.
  • Build a committee to gain a broader perspective with champions from across the bank at different levels.

Remember, no single division owns a customer, it’s a collaborative effort throughout a customer’s journey and their relationship with the bank which means technology needs to be effective from the top down and from the back end of the bank to the front lines.

How Silverline Can Help

Silverline specializes in highly regulated industries including Banks and Credit Unions. We position ourselves with experienced advisors and become a trusted partner to banking institutions to be able to make strategic decisions with technology. Silverline’s banking experts have hands on experience making buying decisions with technology and share best practices to measure success. Contact us to learn more about how we can help!

 

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