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If I Were a Bank CEO... Vol. 6
The Four Ps of Buying Banking Tech: A CEO’s Journey to Being Future-Ready
As a bank in 2024, we have to embrace what it means to be a digital business. We have to embrace that we are operating a software company that happens to provide banking services. This being the reality, we now have to enhance our capabilities in order to thrive.
The best community-oriented digital businesses have a “high tech, high touch” approach to their customers and operations. They want to be efficient and integrated, with technology that makes their customers’ lives easier and more satisfied, while also supporting the business’ team in areas where they can provide personalized, higher value experiences. Community banks, being cornerstones of local communities and enduring relationship capitalists, are uniquely positioned to take advantage of this “high tech, high touch” opportunity for their customers.
So, how do we become better buyers (and users) of technology at the bank?
The first "P" - Start with a Philosophy
What drives your bank’s philosophy? Is it the fear of loss, or the possibility of gain?
To compete in today’s environment, you probably need a bit of both – fear of irrelevance and customer loss can motivate behavior, but so can the opportunity to grow, be more effective and more profitable. At my hypothetical bank, our philosophy would be to improve the bank’s efficiency ratio through technology investments, while also adding in new, profitable revenue streams that increase our relevance with customers.
What are the key action steps?
- Define the vision and targets for the bank through the next few years
- Communicate this vision to the team and continually reinforce it
- Develop a workplace culture designed to support everyone in achieving this mission
The second "P" - Develop a Plan
We can say that we’re going to be more efficient and more relevant and competitive, but we need to be action-oriented toward actual results. The bank already has smart, capable people who understand the business and its customers. Get them involved in identifying the areas of opportunity and what should be in the strategic plan. Knowing that potential solutions will drive efficiency or new revenue, as examples, is important, and then you need to create a priority list and work from it.
What are the key action steps?
- Document the objectives of the plan (efficiency, revenue, profits, growth rate, etc)?
- Make a priority list from the objectives
The third "P" - Decide which People will Lead the Change
Successful technology adoption in banks often hinges on having a dedicated person or team driving it. We need to identify and empower these key people at our bank to be more capable and confident with technology in order to be successful in our endeavor.
Their primary activities would include:
- Serving as the first point of contact with fintechs and other technology providers
- Conversing regularly with leaders across the bank about their needs and areas they see for improvement
- Learning what’s out there through industry networking and events
- Conducting research with various groups, both internal and external
- Driving the technology adoption process (to prevent stalls, indecision and inaction)
The fourth and final "P" - Solidify a Process
When you want to be intentional in building confidence and capability in anything, you need practice and repetition. Technology decisions within the bank used to be infrequent, rendering that internal expertise unnecessary. But it is necessary now.
With a good process and regular iterations, a bank team can develop knowledge and confidence around implementing and using technology that enables the bank.
Here’s an example process:
A good process will establish the right cadence for decisions and change at the bank. This will help the organization become not only comfortable with, but excited about change.
At my bank, we would develop a checklist for each stage of the process and document our activities and approach.
By adopting the 4 Ps, we become better buyers and users of technology; we strengthen our position as community-oriented digital leaders, ready to provide unmatched value and “high tech, high touch” experiences to our customers, while fostering sustainable growth and relevance in 2024 and beyond!
Get in touch with the BankTech team.
