Analytics can help address both the critical problems of today and the unpredictable issues of tomorrow. You want information and capable people responsible for raising flags and diagnosing the underlying causes of emerging issues before they become critical. Analytics enablement positions you to detect and put out sparks before they are fires.
When considering analytics, many financial institution leaders ask, “Who is going to use it?” As we talk with more and more institutions, we’ve learned that the real question is, “Who is going to champion it?” – getting that right is one of the critical success factors when enabling analytics capabilities.
For all of us, embracing a new idea is more natural if we identify with the underlying rationale. For example, look at how grandparents everywhere have embraced Facebook. No one ever anticipated that. But the tool helps them look at and share pics of their grandchildren and stay in touch with far-away family members. When they saw the rationale, they adopted an entirely new process for communicating with loved ones.
The same goes for your organization. The goal cannot be to implement analytics – technology is just an enabler to identify and monitor what hinders the institution’s profitability, overall performance or ability to deliver more value to stakeholders. Awareness of the real business rationale for investing in analytics makes it easier to identify the perfect adoption champion in your organization.
Awareness, however, must be accompanied by the desire to change. That raises the need to deal with resistance. In our experience, we often see inertia as barrier to adoption. Leaders want to have up-to-date capabilities, yet they may not be willing to leap into unknown territory when there is no burning issue or not enough awareness that change is needed.
Resistance to change is natural among financial institution leaders. It’s part of our industry’s risk-aversion mentality, and it’s a very good thing most of the time. Change means “risk,” and risk is “bad.” Or is it? Change management means understanding what we are being tasked with implementing and knowing how to manage the risks involved. We’ve all seen initiatives that turned out to be career-limiting moves when they didn’t work out, but battle scars are not a legitimate reason to disengage from change.
The organization structure of most financial institutions – built up around silos of deep expertise – does not help adoption. For example, innovation in the marketing team does not always produce benefits to the operations or the finance teams. Executives in each area tend to work inside their lanes to retain control over their resources to satisfy departmental needs without being bogged down by consideration of the organization’s overall business strategy.
This is why we strongly feel that the conversation must move from “Who is going to use it” to “Who is going to champion it” as the defining element of success.
“Championing the future” is an opportunity to create stretch assignments for officers selected for promotions or identified as leadership prospects. They will work to spread the gospel of fact-based decision-making using hard evidence, testing and measuring.
For example, who in the organization can work with the finance team to monitor the real impact of marketing campaigns on the cost of funds and your portfolio, and collaborate with operations in making underperforming branches more effective? This role may not exist in the organization today, but thinking about it as a role misses the point. It does not need to be a “role,” but someone should definitely have that mandate.
Let us close with an anecdote from a consultant who worked at Coopers & Lybrand (now PwC) back in the 1980s, at the time when computer auditing was new. They puzzled over whether it would be more efficient and effective to train computer scientists on how to audit, or train auditors on how to use the available technology.
Ultimately, experience showed it was much easier to train the auditor on the technology than vice versa. Why? Because the auditors already thought analytically and logically, so learning new technologies was going to come quickly to them. Learning the business side is the hard part – it takes a lot of time and experience to understand how financial institutions really work.
When looking for your analytics champion, we suggest you look for people with knowledge of the business, natural curiosity, the ability to learn quickly on their own and to reach across organizational silos. This will be the right person to help move your bank or credit union to the next level.
Holly Hughes, BAI CMO, will share BAI’s latest banking channel research and host a conversation with Colleen Wilson, Vice President, Product at MANTL, on what the trends mean for financial services leaders....
Compliance training and professional development courses that are efficient, effective and on-point. Give your people the latest industry-approved tools they need to improve performance, reduce operational risk and better serve your customers.