If you’re a bank or a financial company, the digital banking experience is one of your most essential technological components. It’s undoubtedly the most visible to your customers. Being complex, it’s unsurprising that many organisations engage specialist vendors to either accelerate their digital banking efforts or take it off their plates entirely. However, various dangers exist in the decision to go all-out with a specialist vendor. Making the wrong choices could mean carrying an anvil around your neck. I’ve worked in fintech for 20+ years. In that time, I’ve identified the top three fatal mistakes banks and financial companies make when selecting their digital banking technology (front-end). Let’s get into it.
Out-of-the-box (OOTB) UI solutions are like a flame that non-technical executives are drawn to. Why is this? It may be because it’s something tangible they can see and more easily understand than APIs, back-end services, and architecture. This is a trap they often fall into. Most, if not all, solutions that come with OOTB UIs have banking features and functionality tightly bundled up. This means the logic under the hood that powers everything is inextricably welded to the design. If you want to make changes – and you will – there will be a cascading knock-on effect with everything else. It can quickly get ugly! The result is that the speed-to-market benefits you thought you were buying are negated. This is because making changes and deploying new features and capabilities takes much longer as you work to unpick the knotted design of the product you bought. You could end up limping around with that technological anvil tied around your neck. Even if, by some rare miracle, your vendor did architect its solution to accommodate your customisation, as soon as you change the code, there may no longer be an upgrade path. This will result in you having to absorb the cost and effort of managing the code (and probably paying the vendor an annual fee for, well, nothing). It’s money down the drain.
It’s unrealistic to believe digital banking success is a finish line to be crossed. Ambitious digital banks should agree that instant victory is unachievable in a first release. True digital banking experience development comes about via continuous innovation and delivery of improvements. You don’t need to have the significant resources of a top-tier bank (or a top-five global neo-bank) to adopt a rapid iteration mindset. The mindset alone will help you adopt a more considered approach to continuous, incremental growth and improvement. More consideration means better decisions around the technology you select, which needs to be an empowering force that enables continuous improvement.
Make no mistake. If you’re an ambitious financial services business, you are a technology company. There’s no getting around this fact. So, setting off on a technology development journey without the proper Chief Technology Officer (CTO) is a recipe for trouble. Equally, having a CTO and not listening to their counsel is something I’ve seen happen too often. It’s correct that a CTO’s passion for engineering should blend appropriately with business pragmatism. Yet, building a digital banking solution is fundamentally a technical undertaking, so empowering a CTO to shepherd the rest of the execs in this regard is a wise endeavour. If you’re choosing a digital banking solution – or any deep banking technology – you need a highly competent CTO who’s not only present but is given the wheel. They should wield a degree of autonomy because there are already many old technologies touting themselves as ‘next-gen’. Non-technical execs are too easily bamboozled by the theatre of the presentation – passing off a horse and cart as next-gen. Building a digital banking solution requires a technical undertaking, and a highly competent CTO plays a crucial role in its success. Take the time to get a good CTO, and take their counsel seriously. Last but not least, in the earlier days, technology in organisations was mainly treated as a cost centre, executing orders of “business” departments. In today’s world, where technology is a crucial enabler of innovation and customer satisfaction, it is vital to ensure technology leadership is present, takes ownership, and participates in critical business decisions, providing valuable insights on how technology can power up the strategic impact.
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