As banks pursue more digital initiatives, one buzzword comes up again and again: “digital transformation.” This two-word phrase succinctly captures an inescapable trend — that customers increasingly turn to the internet to carry out traditional banking activities that they used to visit a branch to do.
The move to “go digital” will only escalate as millennials and Generation Z continues to demand that they can easily accomplish all things banking on their mobile phones.
For banks, transforming manual processes into digital ones can help improve efficiency and streamline operations. The path to get there, however, sometimes proves long and expensive for banks that don’t choose their digital partners wisely.
“We can build it in-house”
Banks can have mixed feelings about digital initiatives that are built in-house. Projects can have long lead-times and a rigid set of deliverables.
Building in-house usually can’t take advantage of the experiences of other banks implementing similar projects. Many on the implementation team find they must create a solution they’ve never worked on before, so they don’t have any best practices to rely on.
This “reinventing the wheel” approach tends to be the most costly for the bank, and usually results in the least flexible solution. Further, few in-house digital solutions end up being state-of-the-art. The bank is essentially starting with “Solution 1.0,” rather than a proven solution that has been improved and enhanced over time.
A superior solution faster
More vendors continue to appear on the banking landscape, ready to help banks with their digital transformation projects. Some can get you to a better result with less money and in less time — when you know what to look for. Consider these seven points before choosing your digital partners:
1. Look for deep experience with banks of your size and complexity
Some solution providers work with many industries, and merely adapt their generic solution to banks. Others have a bank solution that may only work for smaller banks.
Your unique bank strategies, models, and processes may be more complex or specialized. Find digital partners that have deep experience with the level of complexity of your product line and pricing models.
2. Demand proven experience in integrating with bank systems (both internal and external)
The last thing your bank needs is another standalone system that doesn’t play nice with your other systems. Any digital partner you’re considering should have experience in integrating the proposed digital solution with your other bank systems.
That usually means choosing a partner that proposes a solution with an Open API. You want to be sure the proposed solution can easily integrate not only with your in-house systems, but also with any outside services and tools that you use across the bank.
3. Realize that solutions evolve with user suggestions and enhancements
Your bank doesn’t want to use the “1.0” version of a solution — you want a proven solution that is working for other banks. Ideally, you want a solution that continues to evolve based on the needs and suggestions of its other bank customers. You’ll benefit from the experiences of other banks with the solution, and you may enjoy features incorporated into it that you hadn’t even considered.
4. Seek best practices guidance from the solution provider
The best digital partners bring to the table a deep understanding of what works for their bank customers and why. They’ve solidified a set of best practices that they have seen work over and over that they can share with you.
Ideally, the partner doesn’t just provide software. They should be experts in their type of solution to guide you in getting the most from the system. They should provide guidance throughout the implementation, to give you a high probability of achieving successful results.
5. Find a partner flexible enough to support you — not the other way around
Your bank shouldn’t have to conform to the proposed digital solution. The solution should be flexible enough to be tailored to your internal models, products, and processes.
Any digital solution should support your particular procedures while streamlining them and making them more effective.
6. Ensure the solution can support evolving needs
The right digital partner will propose a solution with flexible technology, to allow the solution to continually evolve as your bank evolves. The solution should be highly scalable and easily modified, so it can grow with you and support future new ventures.
7. Narrow your focus to specialists in the type of solution you’re looking for
Many firms say that they “will build whatever a bank needs.” Alternatively, those who have developed a specialty in a particular type of solution have become experts in how to make that solution really effective for banks. You can take advantage of that expertise and successful implementation experience.
When you’re undertaking a digital project, the “best of breed” solution in the category may help you achieve your objectives faster, with a proven solution that combines features most requested by banks of your size.
When embarking on a new digital initiative, carefully selecting your digital partners can help ensure that your efforts lead to true digital transformation.
Vanessa Wu is the managing director, business development and product strategy, at Brilliance Financial Technology, a provider of risk-based pricing and customer profitability systems worldwide.
Want more BAI Banking Strategies? Sign up for our free newsletter!