As a bank or financial company, the digital banking experience is one of your most essential technological components. It’s the primary interface with your customers. Given its complexity, many organisations turn to specialist vendors to accelerate their digital banking initiatives or manage them entirely. However, this approach comes with risks. Poor choices can result in significant burdens.
With over 20 years in fintech, I’ve identified the top three fatal mistakes banks and financial companies make when selecting their digital banking technology (front-end). Let’s dive in.
Mistake One: Buying an Out-of-the-Box User Interface (UI)
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 they’re tangible and easier to understand than APIs, back-end services, and architecture. This is a trap they often fall into. Most OOTB UI solutions have banking features and functionality tightly bundled together. This means the underlying logic is inextricably welded to the design. If you want to make changes—and you will—there will be a cascading knock-on effect. It can quickly get ugly!
The speed-to-market benefits you thought you were buying are negated because making changes and deploying new features 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 customization, 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.
Mistake Two: Focusing on Developing a Set of Features Rather Than Building for Continuous Innovation
It’s unrealistic to believe digital banking success is a finish line to be crossed. Ambitious digital banks should recognize that instant victory is unachievable in a first release. True digital banking experience development comes through continuous innovation and ongoing improvements. You don’t need the significant resources of a top-tier bank or a top-five global neo-bank to adopt a rapid iteration mindset. This mindset fosters a more considered approach to incremental growth and improvement, leading to better technology decisions that enable continuous enhancement and innovation.
Mistake Three: Banks Don’t Have (or Don’t Listen to) a CTO
Make no mistake: if you’re an ambitious financial services business, you are a technology company. Setting off on a technology development journey without a proper Chief Technology Officer (CTO) is a recipe for trouble. Equally, having a CTO and not listening to their counsel is a common mistake. A CTO’s passion for engineering should blend appropriately with business pragmatism. Building a digital banking solution is fundamentally a technical undertaking, so empowering a CTO to guide the executive team is wise. The CTO should have autonomy, as they can discern between genuinely next-gen solutions and outdated technologies.
In today’s world, technology is crucial for innovation and customer satisfaction, making it vital for technology leadership to participate in critical business decisions and provide insights on how technology can enhance strategic impact.