It’s difficult to have a day go by when you don’t hear the term “Fintech.” As the market continues to evolve, new entrants emerge and older players continue along their respective maturity curves. With all that noise, how do you know if a fintech solution is right for you?
“The first step should be the creation of your institution’s unique digital roadmap,” said Tom McGill, Profit Resources Relationship Manager. “Absent a plan that defines your destination and identifies your gaps, the allure of the newest fintech can be quite a distraction.”
The digital roadmap should not be a static document but one that continues to evolve with the industry. McGill recommends putting the digital roadmap down on paper as the financial institution sees it today and then committing to re-assess on a quarterly basis. Tangible goals should be assigned along the roadmap and measured as discreetly as possible. For example, a measurable goal could be to reduce the time from application to approval on consumer loans by 50 percent.
A successful fintech journey mandates an honest assessment of in-house skills, with outside help being brought in as necessary. These skills are not limited to technology but also focus heavily on change management.
“Our experience has shown that most journeys like this fail due to insufficient change management activities,” McGill said. “If you don’t have people with these skills on your team, partner with someone who does.”
Finally, the vendor management policy and process must be reviewed to align with the overall digital roadmap. Many policies rely upon legacy technology models and do not contain enough emphasis on how to structure partner relationships with less established providers. Risk mitigation remains critical, and by the inclusion of performance goals, expense sharing and increased due diligence, it is possible to achieve a proper balance.
“Stay focused on your goals, identify and prioritize your gaps, define what success looks like, get the right resources involved, and you will be successful,” McGill said.
In part 2 of this blog series, Henry Watkins, Profit Resources Director of Processing Solutions, will focus on preparing a request for proposal (RFP) and evaluating responses from fintechs.
Profit Resources specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.