As the hype around artificial intelligence (AI) and other next-generation technology intensifies, even the most risk-averse banks and credit unions are now determined to quickly take advantage of these emerging, yet powerful capabilities.
But while many financial institutions (FIs) feel the need to move aggressively in their modernization efforts, it shouldn’t come at the expense of proper planning. In today’s economic environment, banks and credit unions don’t have the luxury of wasting
money on any more failed IT projects. And unlike in the past, they can’t wait years to hopefully see a return on their investments.
Instead, financial providers increasingly want quick, modular updates to their technology environments that provide immediate value while still pushing the institutions forward on their overall IT strategy. But it’s not just about deploying new applications
and hoping for the best. These aren’t just “digital transformations,” they are actually business transformations that are supported and driven by technology transformations.
As FIs move quickly to modernize, C-Suite leaders and board members need to work closely with their in-house tech experts to understand how software can help the FI achieve its overarching goals. And they should institute a culture that allows for experimentation
and failure, one where products are shipped quickly and adjusted constantly based on user feedback.
By combining the right IT changes with the right cultural changes, banks and credit unions can start reaping the benefits of continuous innovation much faster while executing on their business strategy.
An internal partnership
When it comes to IT modernization, a top-down edict no longer works. Instead, the FI’s key business objectives must be the driving force behind technology adoption.
Employees need a clear idea of the outcomes they should be working toward – whether that’s increased product sales, greater efficiency, or improved employee/customer satisfaction – and how the new systems can help them get there. Otherwise, there could be
considerable backlash to any new workflows.
And while workers should be able to experiment with different tools to meet objectives, it must be done responsibly. Close coordination between bank leaders and their in-house technology counterparts can help ensure there’s alignment on IT and business strategies
so investments aren’t wasted.
The IT department is no longer just an order-taker. In the era of data-driven insights and AI, they are now the nerve center for the entire organization. And any barriers between IT and other parts of the business must be eliminated.
Measure in sprints
Customer service in banking has never been more important. Most FIs are offering similar products. So, competition comes down to how well an institution serves its clients – it comes down to the customer experience.
Customers are demanding personalized experiences from their FIs. At the same time, customer and member preferences are changing faster than ever. Banks and credit unions must build the necessary IT infrastructure to support those tailored interactions and
adopt a culture of continuous improvement, one that enables them to more quickly pivot when expectations change.
Modernization projects must also move fast, with small updates happening in days or weeks, rather than months. Shorter timelines mean that companies can more easily track the success of their investments.
And end dates no longer exist. Instead, the technology must constantly evolve along with changing market trends and customer preferences so institutions can continue to deliver the meaningful experiences that members demand.
Think like a tech company
Ultimately, traditional banks and credit unions must start acting like technology companies because that’s who they are now competing against.
Fintech rivals were born out of Silicon Valley and embody the same cultural mindsets that helped create today’s leading software and AI giants. FIs must adopt those same principles.
It’s now all about speed. Banks and credit unions must embrace a “test and learn” mentality. Then, by working with objective third parties outside of the institution – such as a consulting firm – leaders can more easily pinpoint the technology projects that
are proving valuable, as well as quickly ax or adjust those that aren’t.
A “siloed” mindset no longer works, and neither business nor IT alone can run the show. It’s time that banks and credit unions eliminate the separation between IT and the broader business for the betterment of the entire organization and, ultimately, its
customer base.
The only way to ensure a successful and continued modernization effort is by bringing the two sides together under a common goal or strategy, and then letting the culture of test and learn take over. Like any good marriage.
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- Source: https://www.finextra.com/blogposting/25411/a-marriage-in-the-ai-era-why-business-and-it-need-to-act-like-a-unit?utm_medium=rssfinextra&utm_source=finextrablogs
