How to Identify the Right Partner — Beyond a Solution

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The decision to outsource a function or task is often a difficult one for banks. Executives need to consider many different factors. And once they decide to outsource, the search for the perfect vendor partner begins. An array of different solution partners often exist for banks to choose, so how can executives select the right partner for their needs?

Bankers should begin by evaluating vendors by inquiring into their implementation process — not solely by reviewing their technology. The key is to ask important questions early. Implementation is often filled with pain points and obstacles that banks and their partners must address; it is easy to forget about the huge implications of implementing new technology and processes. As the bank sheds older processes, how can their new partners help them connect the dots to ensure the end result for employees and customers improves?

Before the Process Begins
Bankers may need to ask themselves some hard questions before they begin the search for a partner. This process will disrupt the current status quo. Is their organization truly ready for changes associated with an implementation?

Usually, the people making partner decisions are not the ones who will have to work with the new technology on a regular basis. Bring the day-to-day employees into the conversation early: they can provide insights about how processes work today and management can give them with a realistic understanding of what the implementation process will look like. These employees have a unique perspective that might trigger additional questions that decision-makers had not thought to ask before.

There are two discussion-driving questions bankers can ask potential vendor partners to help when deciding on which solution is going to work best for their organization.

1. How do I get from Point A to Point B?
The goal is to uncover as many pain points as possible and discuss how the potential partner will work with the bank to solve them. Every implementation is going to have challenges, but many potential vendors do not mention challenges during the sales process without direct questions from the bank. Getting a good idea of what the overall process looks like helps prepare banks for where issues may arise. Executives should ask questions like:

• How does this new process pull data or connect to user information within the core?
• Are all processes automated? Does any human intervention need to occur?
• How does the vendor update the core to keep a single source of truth?

2. How strong is your project management?
Before bankers even have these conversations with a potential partner, they need to make sure they have a good understanding of the technology and workflow changes that will happen. Similarly, bankers need to ensure that their potential partner understands the realistic impact those changes will have on the institution. Shared empathy and understanding will provide both partners with a better implementation process.

Vendors typically have their own project management methodology. It is important to learn what that is and evaluate whether or not it will work for the bank’s team. Bankers should ask questions like:

• Who does the vendor project team consist of?
• Is there a timeline of key deliverables and accountability?
• What are the typical challenges that stall similar projects?
• How does the vendor help the bank overcome these challenges?
• Can they provide a sample testing plan?

Good partners will create and communicate a realistic timeline with drop dead dates to make sure that everything remains on target. Finding a partner that will be open and honest is priceless when it comes to ensuring a smooth implementation.

At the end of the day, the bank is going through a transformation. The ultimate goal is to provide the organization or the end user with better technology or an improved experience — maybe both. Doing due diligence and asking the hard questions early prepares the bank for a better implementation process. Working to understand all the implications that come with integrating new systems and a new partner will set banks up for success and help executives choose the right partner — beyond just a solution.

Strategy Before Structure

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Imagine this scenario: A bank executive meets with an innovative and forward-thinking tech leader and is immediately taken in by their offering. They think it would make a lot of sense for their bank and ask the tech leader to meet with the rest of the bank team, who are similarly impressed. They do their due diligence and find that all of the tech company’s customers give them glowing reviews.

They move forward, and after some time and effort the product launches. Everyone is excited … until the product falls completely flat and ends up doing nothing to help the bank do business better. What happened?

Unfortunately, too many banks work with vendors without considering whether their products actually fit into the larger strategy of their bank first. Instead, they do the opposite: They mold their strategy around the technology vendor they end up working with.

In these situations, the principle of strategy before structure is really important. Are the actions you and your bank are taking defined by your strategy? Or is your strategy being driven by your vendors? It should always be the former.

One example that comes to mind is banks investing a lot of time and money into online lending or account opening, only to be disappointed when they are met with mostly fraud and spam. Often, this is because they never built out an online marketing strategy for the software to support the new technology. Conversely, we know banks that have experienced tremendous results through the same channels — when it was part of a deliberate strategy to go online.

Building a Strategy
If the above scenario hits a little too close to home, you are not alone. But in order to keep it from happening again, there’s a few things to keep in mind moving forward:

1. Understand what is out there. It’s important for bank executives to understand what is available when it comes to new technology. Your team should be speaking with and engaging with tech leaders to understand what is possible.

You should also be speaking to other banks to find out what they are doing. Identify a banker in a different state or market where your institution doesn’t compete and ask them what tech stack they are using, both successfully and maybe not so much.

From there, take the information you gather back to your institution’s drawing board. Think about your bank’s strategy and use what you now know is possible to advance it.

2. Work with transparency. When working with vendors, it’s common for banks to be secretive about their evaluation process and which vendors they are considering. In my opinion, this is the wrong way to go about it. Working with vendors should resemble World Wrestling Entertainment’s Royal Rumble: Everyone is in the same ring and the last person standing wins.

This is the best way to ensure complete transparency and get the management team the clarity they need to make a decision. It also allows vendors to work together and balance off each other, rather than handicapping them by asking them to design a system without knowing all the pieces in play. We have seen scenarios where two seemingly competing vendors can actually come together to form a better total solution.

In my opinion, this is also the best way to cut through the noise and see who really understands your bank and strategy the best. Ask your vendors to explain the differences between them and the other organizations you are reviewing and compare notes.

3. Run a pilot program. When it’s possible, your bank should implement new tech products first as a mini or pilot program.

Find a division in your bank — or maybe even just a single banker — and let them try out the
product first. If that’s not possible, ask the vendor if they can set up a sample instance or use dummy data in a workshop before going live.

These kinds of tests allow your institution to agree on the success criteria and see if the vendor can meet them, before spending the time and energy to go live on a large scale. Any vendor worth working with should have no problem offering such an option.

With these tips in mind, bankers can be empowered to move forward with new technology and services that will actually deliver on their promises of helping their business and customers — rather than fall flat from the start.