The 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.
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
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.