The Disconnect Between Technology and Analytics

technology and analyticsThe financial services industry is currently facing major technological disruption, and getting—and keeping—their ducks in a row is critical for institutions who want to survive. Doing so, however, requires a degree of cohesiveness, which appears to be sadly lacking at present, according to statistics from the Bank Director’s 2017 Technology Survey.

Fast Follower Strategy

It’s hard for any business to drive change in an area without having the right skills. Many banks like to believe they are “fast followers” in technology, but the fact is to fit that criteria they would need to have:

  • A qualified team conducting assessments of ongoing technological developments and their economic impact, and recommending ways to integrate them into operations.
  • Skilled employees charged with implementing recommendations quickly after approval is received, using an agile, rapid process.

In the absence of either, the institutions follow slowly at best, if they are following at all.

Conflicting Opinions

For any business to succeed it’s important for its executive team to be on the same page. That generally means being agreeing about the basics, at least. The study showed that in smaller banking institutions with assets of $5 billion or less, fewer than one-third of respondents were convinced the bank had enough expertise in technology. In spite of that, less than half of the banks’ boards found themselves discussing technology issues at their meetings.

The study also indicated more CEOs than CIOs believed cloud computing would have a higher impact. Since CIOs are typically more closely involved in technology, one would expect their opinion to carry more weight—yet they were largely outvoted on this issue. Big data and analytics, especially, appear to be taken less seriously by top execs, with only 56% of CEOs and chairpeople believing these would impact them in the next 5 years.

Getting into AI

When it comes to artificial intelligence (AI), in spite of all the hype surrounding it in 2017 the study found only 10% of CIOs thought it would have an impact on their institution by 2022. Using an analytics solution to understand the account holder activities can help financial institutions drive profitability by staying ahead, instead of lagging behind. The ability to track the success of marketing programs and customer activities would enable banks to monitor the “numbers behind the numbers.” Institutions will be able to discover which components are driving or inhibiting success, uncover the dynamics and determine what makes their KPI’s move.

Agreement on Mobile

The rise of mobile technology is largely the only area where there seemed to be agreement, with at least 70% of all executives concluding it will affect their bank in the next five years.

Resolving the Problem

To eliminate this disconnect, financial institutions need to implement a fast-follower strategy. This would require accurate evaluations of technological developments and their potential impact, an agile planning process to deploy them, and the right teams to execute both. This will enable companies to spend less and make more by increasing their market share and profitability. Utilizing predictive analytics and robust reporting is an ideal way to resolve this issue. If you would like to learn more about how JOHO OneSource™ can make it easy to implement a fast-follower strategy in your financial institution, please contact us today. 


Making Your Core Processing Search Part of a Strategic Data/Analytics Initiative and not Vice Versa

Core processing systems have been undergoing change for a few years now, as Financial Institutions (FI) work to keep up with the demands of their client base. Upgrades to old systems and implementation of new ones is happening across the nation. The typical sequence of events is to select a new core processing system and the ancillary transaction processing options, implement it, and 12 to 24 months later develop a data and analytics strategy that molds to the capabilities of the transaction processing.

At JOHO, we believe this is like putting the cart before the horse, so we developed a new, more streamlined approach to upgrades.

Step #1: Understanding the goals

It’s vital to have a clear grasp of the growth needs of the institution before you begin. There’s little point in trying to adapt your goals to the system you have in place, so if you’re in the process of upgrading now is a good time to ensure your system can scale as you grow. Identify the upper limits of the systems you’re considering, too, and review your FI’s long-term plans to make sure your selection aligns comfortably with those.

Step #2: Analyze current processes

Conduct an analysis of your institution’s current processes, and map it against the desired operational flow. Will the data/analytics strategy you choose require extensive implementation of new processes? Is the FI ready for that? Who will oversee the change management? Who is responsible for data governance? How is access to data controlled? Once you purchase a system or enter into an agreement with a provider, it’s too late to realize at that point that the implementation is impractical.

Step #3: Review the dynamics

If implementing a new data/analytics strategy requires changes to your management structure, it’s essential that you perform a comprehensive review of the dynamics governing both the current and the proposed operational, management, executive, and board makeup. This is an integral part of determining your FI’s readiness for taking on advanced processing.

Step #4: Choose a strategy

Armed with the information from steps 1 through 3, you will be in a good position to decide on a comprehensive data/analytics strategy that will support the needs and goals of your FI and mitigate the typical financial institution risks you face. At this point, you can begin reviewing vendor solutions with the appropriate endpoint for your requirements, and if necessary ask them to customize their solutions to ensure you get what you need.

Step #5: Choose a vendor

Contrary to popular belief, choosing a vendor should be based on suppliers of the strategy you want, not the other way around. Authentic vendors will be willing and able to tailor their products to accommodate FI clients, so it should not be necessary to compromise. Guide your institution through the process of identifying and negotiating with vendors who can offer the solutions you need. These should provide secure, operational systems that contribute positively to the information flow in your “new,” information-oriented organization.

Sound like a lot to deal with? The JOHO AYR™ (Are You Ready) assessment is a 2-week process that provides a professional evaluation of your FI’s present state compared with where you want to be, and delivers comprehensive recommendations for your management team.