Is technology a cost center? How a bank executive responds to that question is very telling… And most are struggling with it.
Bank executives are used to staring at numbers all day long, right? So when it comes to technology and marketing (and many things that are associated with going digital), those things tend to fall under that “cost” column. They don’t typically align. If you’re just looking at the numbers, there are nuances that impact those numbers that might not be so obvious.
You have to consider how technology impacts every aspect of your business. If you don’t, of course technology will show up as a cost center. But if you do, you’ll see how technology impacts your cross-sell, your upsell, your loyalty with your customers, reducing errors, improving efficiency, and even controlling your brand.
Think of the employee that’s doing the same thing over and over again every day. That’s a huge engagement risk. But, if you get some automation there to allow them to very quickly automate those brain-numbing processes, you can let them focus on more highly challenging (and, therefore rewarding) tasks. Isn’t that where you want your employees to be spending their time?
Or, consider your brand. More and more, your experience is your brand. And when it comes to controlling experience, a lot of banks rely on their core service providers to basically give them the experience. The problem here is that the vast majority of small-to-medium-sized banks all look the same because they’re all using one of three core service providers. They have the same experience as the next bank.
It’s no longer about who’s got the corner lot. Branches are over. Now, the primary way in which your customers are engaging with you is digital—so it’s about who has the best app. With this in mind, you need to invest in infrastructures that allow you to design your own site (i.e. experience), and thus build up a brand that is worthy of recognition. If you’re not taking control of your experience, you don’t have control of your own brand.
Then, there’s data security. When many went remote, employees became the biggest security risk because their systems could become compromised. Without the appropriate internal information security teams and risk mitigation processes, customer data could be at risk.
The first step in finding solutions to these issues is cultural; it’s rethinking. It’s thinking more broadly about staffing, people. and resources. Think of standard operating processes, for example. Every time I see an SOP (standard operating process) come across my desk, I think, “Can I automate that?” Or if the same person is doing a task a few times a week, or if a task is very error-prone, I think, “Can I add automation and eliminate the overhead?” If someone leaves, I ask, “Do I have to replace them or can I automate something they were doing?” I look at my overall staffing model to see if it’s the best use of my team’s time.
The other big decision is build versus buy. In the past, it’s been difficult for banks to partner with fintechs because they didn’t have access to the experience. They couldn’t add a link or a panel to a banking page because they didn’t control it. It wasn’t functionally practical. Now, there’s a plethora of fintechs out there that have already done what you’re trying to do: Performance, integration, stability, compliance. Just because you’re not building it doesn’t mean you can’t control the experience.
When it comes to branch experience—or lack thereof, recently—other banks have had to scramble to invest in onboarding platforms, because branches have historically held 80% of onboarding. One step ahead, Quontic had already invested in MANTL—and other bank branches are following suit.
The solution is all about changing the way you think; a different way of thinking about banking.
At Quontic, I tend to stay away from those that don’t do a good job with experience. The first question I ask a fintech is, “Do you have an API?” I want it all to be integrated for the customer, and I want access to the data. I want to ensure a seamless experience for the customer. Most of our investments to date have also allowed us to give more self-service to our customers. In turn, that has allowed us to be a digital bank, quite honestly.
Don’t get me wrong—my ideas don’t always work out as planned. Because banks are built on trust, you have to have that necessary level of security. Sometimes that does compromise your ability to do what you want to do today because the regulations and control have to be in place. In the end, you have to stay creative. I’ve spent my whole career trying to work within the restraints of a highly regulated environment and still be creative.
More recently, we’ve invested more in our resources and in our people. We’re doing this to make sure we have the right people to oversee the stability and performance of our site, build and customize our existing platforms, and make them more efficient. We’ve made great strides in getting the right leadership in place.
Our goal? To provide a transformative vision of how a digital bank works differently than a community bank.
How we do it? We decided that we’re not a bank that does technology, we’re a technology company that does banking. We flipped it on its head. If you want to do the same, you’ve got to get that into your head.