I just read in The Financial Times article, “Community banks fatten tech budgets to enhance CX,” that in its annual survey, Bank Director found that 81% of the respondents had boosted their 2022 tech budget, with the median increase being 11% from 2021. This is good news.
“Nearly half of the banking executives in the Bank Director survey said their most significant concern is that their internal technology operation was not making effective use of existing data. They also worry to a similar degree about their team having an inadequate understanding of how emerging technology could impact the bank and about a reliance on outdated technology.” This is not-so-good news. So, what’s a bank to do? According to the article, and the survey, “align technology with strategy” and “collaborate with technology partners.”
This is good advice. Banks manage mountains of data, most of it unstructured. Not to say that this data is worthless but, well, it is. Unless, of course, it can be transformed into the kind of information that can drive insights and inform decision making.
Luckily, the technologies that can enable a bank’s digital transformation are out there and leaders are smart to be investing in the opportunities. Here’s the rub, though. Making a technology purchase, and I know this from experience, is no simple task.
Here’s what I’ve learned when it comes to buying technology.
Leaders in banking are committed, and have been for some time, to a “digital transformation.” This means managing their information more efficiently, securing personal data, meeting compliance requirements, fending off competitors, and beefing up both their employee and customer experiences. Studies have shown, sadly, that very few feel that they’re making progress in getting there.
And that’s because very few understand what “fattening a tech budget,” and driving profitability with technology, really entails.
First, technology adoption is not simply adopting technology. Strange as it may sound, when a bank is looking to enhance its tech stack with some new solution, they tend to look at the process as, well, buying technology. It’s not. That’s because it’s far easier to focus on tech than it is on people. Why people, you ask. Because buying technology is not just a technology purchase. It’s an organizational change.
So, before you run off and spend your new fattened budget with some vendor who you think can solve all of your challenges, do a few, relatively simple things.
Figure out who your stakeholders are and involve them
A common misperception concerning stakeholders is that stakeholders are users. They’re not. A stakeholder is anyone in your organization who will be impacted by your decision. (Importantly, it's critical to remember that this is not “your” decision. It doesn’t belong to any one individual, and that is where a successful tech adoption starts.)
Engage all stakeholders in building solid user stories
Every individual will be impacted by the new technology in a different way. Here, user stories can be quite effective as they 1) articulate in a simple way the “who, what, and why” of the desired outcome, and 2) guide the buying team along their journey toward choosing the right vendor partner. User stories should take into account:
- Who: who are the various users and what are their unique needs?
- What: what needs to happen to achieve the desired outcome? What technical capabilities are required? What processes are needed, or need to be changed?
- Why: why is this change a priority? Why is it important to the business as a whole?
Engaging all stakeholders is critical here, as those who are not fully involved often fail to understand the importance of buying into the change or what their part should be in making the change successful. They simply understand that a change is happening “to them,” and not “with them.” Instead, they need to clearly understand the purpose of the investment, why change is necessary, how it aligns with your bank’s strategic business goals and how it will achieve an overall enterprise-wide, net-positive gain.
Socialize the change with constant, consistent communication
Remember. An organizational transformation does not necessarily mean all those involved will benefit to the same degree. Some users will benefit, while others may not. This is further complicated by competing uses and priorities, varying degrees of technology knowledge, and differing views of the opportunities and risks. Socializing the change is not easy, but in the end, you’ll save time and money. It’s a known fact that adoption and productivity rates increase when employees are involved early on in the discovery and conceptualization phases of organizational change.
Make sure everyone is informed and aligned.
Failure to achieve alignment on goals – across the entire business – can lead to costly and disruptive missteps. For example, what happens when you introduce a content management system (CMS) for marketing only to discover later that it will not integrate with your customer relationship management (CRM) function?
And that means alignment on measures of success.
Arbitrary definitions of success can and will hinder progress. What is considered a win? Automating a process by 50% could be deemed a success by some, while others were aiming for 80%. ROI, key to measuring the value of any tech implementation, is nearly impossible to calculate when stakeholders have varying definitions of success.
Avoid SOS (Shiny Object Syndrome)
It’s been called SOS and the cause is clear; breakthroughs in technology are occurring on an almost daily basis. Chasing bright shiny objects can lead to continual comparison and fear of missing out. What’s the best way to avoid SOS from the start? Set clear, measurable, agreed-upon, and achievable goals. Then, stick with them!
Put your user stories in front of tech vendors
Much can be learned from vendor collaboration, such as insights gained from past engagements. Ideation workshops, for example, can be useful; not only validating the vendor’s expertise, but also helping you to identify any unrealistic expectations or false assumptions. Now is the time to ask vendors to show you how their solutions deliver against your needs through detailed demonstrations, not simply answering “yes or no” questions.
Take the time you need to get it right
As financial institutions continue to accelerate their technology investments, it’s important to remember that purchasing technology requires a strategic, collaborative approach. Is it a bit time consuming and labor intensive? Perhaps. But it is definitely worth the time and effort it takes to find the technology that is right for your bank and its digital transformation.
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