If you’re in financial services, you probably know it’s true — your company needs to catch up in technology.
Not to pour salt in the wound, but here are a few startling statistics to back up the premise:
- Your workforce itself is lagging; young people aren’t choosing a career in financial services.
- Less than 10 years ago, the first bank enabled consumers to take a smartphone picture of their check to deposit. In 2013, only 10% of banks and credit unions used this technology. Today, some financial institutions still haven’t caught up.
- According to the New York Times, companies like Credit Karma and Lending Club are valued at more than 3 billion dollars. PayPal has 200+ million active accounts. Consumers even prefer PayPal to banks in many instances.
- Blockchain is further disrupting the industry with faster, cheaper settlements.
Why hasn’t the sector been more aggressive about technology
Well, for starters, financial service organizations have been busy with a global financial crisis: the Great Recession. Many organizations took additional steps to keep customers, investors, and employees protected. These companies have also been engaged in changing regulations and demands (such as stress tests) that have tied up resources, preventing another global financial crisis. If you’re a publicly traded, you also saw profits decline as the general public and their investments grew skittish … even if your company wasn’t involved in subprime loans. Dwindling funds and few available resources has made it difficult to keep up.
Cybersecurity has become a bigger threat, further typing up your IT teams.
Also, let’s face it — the very nature of your business is to be risk-averse. In the past, you’ve even been rewarded for your caution in taking technology risks or spending money unnecessarily. In fact, if you receive advice from long-time financial services executives, they may not be giving you good advice; they’re probably not technology savvy.
More than that, fintech is changing businesses from the outside in. As a result, companies are spinning off more aggressive companies that can take more risks, investing in technology themselves to catch up or looking for third-party providers to bridge the tech gap.
So, what needs to change to be more tech-savvy and tech-forward?
1. Be customer-friendly
Financial service companies are already moving more quickly toward interaction on mobile devices as well as leveraging technology to interact with customers. Many, including some insurance companies, also have apps available for customers to use anywhere, anytime. Depositing money, reviewing balances, transferring money — it should all be easy and accessible 24/7.
Chatbots can better service customers through answers to often-asked questions without tying up resources. It’s fast and convenient for customers, too.
Communicate better with the front-line employees
Make it easy for your employees, especially those in customer service and on the front-lines, to get information and understand it. Are tellers, for example, able to look up information and people quickly, like where another branch is? Can investment advisors quickly look up information at a client meeting over lunch? Intranets can help, providing opportunities to engage and chat as well as search fast to get meaningful results. By empowering your employees to get the information they need when they need it, you’re engaging them as well as making them more productive.
2. Simplify your architecture
Your enterprise architect probably has a jumbled Visio drawing — and it’s ugly. It details legacy systems and software on top that your company uses to integrate with other legacy systems. Rethink your architecture and partner relationships.
For example, if your company uses Microsoft as a major technology vendor, consider leveraging them more. Weigh, through security policies, what you can move to the cloud. You may not need a whole new social intranet separate from SharePoint. Instead, leverage current technology better. Best of all, Microsoft already supports a variety of integrations to make it easier to do business.
Some companies are considering doing more outsourcing of technology, including their back office. After all, financial services may not be tech-savvy, but they know companies that are. If you do, ensure you’re making a smart short-term and long-term decision.
3. Be secure
Run, don’t walk. Security is everything in financial services and banks, credit unions, insurance companies, etc. are big targets. Every organization is spending more on security, especially cybersecurity. The biggest issue isn’t necessarily an external threat, but your own, well-meaning employees. Whether they take the bait of a phishing scam or hold the office door open for someone without a badge, they may be making your company less secure. Include, as part of your approach, training and devote a whole section of the intranet on the topic. The more aware they are, the better employees can protect your organization.
4. Power up your brand, including your employer brand
Employees shouldn’t have to look to other companies. If your organization hasn’t already, come up with retention ideas. Retention includes a holistic method for how you deal with employee engagement, including how you communicate with employees. Employees should have new challenges, be able to move into new positions, etc. For ideas, download our free eBook on employee engagement.
Probably the biggest part of your workforce is retiring now or soon to retire. That means you need workers. According to Monster, financial services has a hiring boom. To attract Millennials and Generation Z, think about salary, but also think about intangibles that may be outside-the-box for your traditional institution, such as volunteer opportunities, work from home options, work-life balance (including more vacation), wellness programs, etc.
5. Manage the change
It starts with people, even in technology.
Increase communication. Get employees ready for the changes — increasing business acumen to understand what’s happening and why changes are necessary. Invite employees into the process, even asking them to lead what needs to change. Have areas on your intranet devoted to understanding, questioning, accepting and embracing change.
Because financial services are usually more traditional than other businesses, even credit unions, this may take a little time. But it’s a worthwhile effort to get your people ready for technology and shifting resources to be more customer-friendly, secure, simple and branded.