Investing in change is expensive. Besides the financial aspect, change can drain a financial institution’s resources and severely impact internal processes. The reality is that change is often necessary to continue providing the best experience for both customers and employees. Bankers must invest time, effort and money into selecting the technology partners that will solve a crucial pain point in their organization.
Step 1: Identify Your Common Force
There are four common forces that prompt a bank to invest in a new partner or technology. Depending on which force is driving the decision for change, executives need to prioritize different factors when evaluating potential vendors.
When systems change: When banks change one major technology — whether a core, payment vendor or online banking solution — it has a ripple effect across their other technologies, relationships and processes. Banks often use this opportunity to change or update their other technology partners to create a more cohesive end-user experience that integrates with the new system. They have to ensure that their vendors can handle that new system.
When there is an urgent need: Banks that have a vendor relationship that does not work well with their own internal workflow can be another force for change. This dysfunction can ultimately result in the bankers being forced to step in and help complete responsibilities because the vendor isn’t able to meet expectations. Instead of gaining resources and offering the best end-user experience, the bank focuses its time and effort on putting out fires.
When a solution is under review: New leaders or new managers can be an impetus for change, as they seek to understand their vendors better, evaluate their value and look for where they have efficiencies and where they do not. What benefits do different vendors bring the bank in simplifying and decreasing manual operations? Is this vendor improving efficiency so that end users have the desired experience? This force is more proactive and prompted by an evaluation where the opportunity for change is not a mandatory given. This review of vendors is important for financial institutions to do because it could uncover issues that have yet to reach a pain point level and can still be addressed.
When a vendor impacts the institution’s reputation: Occasionally, banks do not receive the high-quality experience they expect from their vendor and seek change to maintain their reputation. The end product does not feel competitive or has caused errors for its customers, which hurts brand perception and loyalty. Like the previous force, changing vendors before things escalate gives the bank much more power and flexibility to choose the best partner in a timeline that works for them.
Step 2: Ask the Right Questions
Bankers must evaluate their vendors based on their current common force. They must first identify why they need to change. What are they trying to solve? Then, they can leverage that pain point to develop questions for potential new partners based on the root issue impacting their situation.
Questions like, “How do you integrate with our vendors?” or “What does our daily engagement look like?” or “How do you guarantee your process?” can help executives evaluate vendors more efficiently.
Vendors want to avoid viewing themselves as replaceable. The truth is, there is a lot of competition out there, and not a lot of difference between solution offerings. Bankers need to know what to ask to get a solution that meets their needs and addresses their deeper concerns.
Peeling back the onion that is a bank’s current workflow might cause tears, but that is the only way executives can solve vendor issues that impact the institution’s transformation, improve the end-user experience and continue to stay competitive.