The banking and financial services industry is estimated to hold trillions of dollars in assets and employs almost six million people in the U.S. alone. While the industry clearly plays a critical role in the nation’s economy, it is continuously evolving and working to meet and surpass consumer demands, including the need for new, mobile services that provide real-time financial information.
"IT and software services firms are well-positioned to have a transformative impact on financial services firms"
Over the last several years, especially as millennials have entered the employment market, it has become increasingly clear that the typical banking customer is changing. People today are demanding digital services, including digital management, access to online portals, mobile payment opportunities and other forms of digitalization within the banking industry.
As more consumers want technology-based services, banking and financial services companies are facing a new challenge—how to provide the services demanded without impacting the current services offered.
The solution is to truly partner with the right technology companies, and the right software services firms. With the growing request for on-demand digital services, IT will play an important role in making these changes happen and in helping banking and financial service companies undergo the transitions and transformations needed to address consumer needs.
Selecting the Right IT Partner
It’s not an overstatement, then, to say that IT and software services firms are well-positioned to have a transformative impact on financial services firms. IT firms are strongly equipped to provide technological solutions, and are capable of implementing and developing the solutions that customers are now demanding. As banks continue to evolve in their offerings, they should look to IT services firms to work as more than just consultants, but instead as trusted business partners that can aid in providing client-centric solutions.
Gone are the days where software services firms simply augmented the IT staff of a bank. Previous generations of IT services focused on back-office support and helped with technology implementations. While those services still provide clear business benefits, banking and financial services companies should have higher expectations for their IT service partners today.
By being more in touch with the latest technologies offered, they can actually help the bank understand and service its new clients better. Omni-channel portals, analytics platforms, business process management systems, revitalized CRM systems, data aggregation, and robotic process automation are some of the cutting-edge areas in which the best software services firms have built capabilities and intellectual property that every bank can leverage.
Does this mean that IT services firms are now a direct competition to the financial services industry? Not at all. Instead, the two are working more closely together than ever, developing a relationship that is mutually beneficial and improves and standardizes processes for both.
So as one reflects on this increased partnership, one might ask how to most effectively work with an IT services company—the simple answer is to treat them like a true service provider. There are few quick steps to make that happen:
• Bring the IT service provider up to speed on your business needs and objectives—By looking at the problem from an IT perspective, the IT service partner may be able to think of new technologies or solutions that will provide better results.
• Don’t bring the IT service partner in at the very end—As your company is evaluating itsneeds, there is a tendency to try to solve the problem internally and then ask the IT service partner to implement the change. By doing this, you could limit potential outcomes.
• Continue to engage with the IT service provider after the initial implementation— Technology transformations don’t happen overnight, so making sure that the IT services partner is engaged over months – measuring results, studying customer trends, and making adjustments – is the best way to evolve your company appropriately.
Preparing for the Future in Banking and Financial Services
I predict technology will take on even more of a central role within the banking industry in the coming years. Some of the biggest financial services firms in the world have already commented that their biggest competition in the future will come from non-traditional sources—from the likes of Google and Amazon, but from much smaller, nimbler Financial Technology players. In their quest to go toe-to-toe with these players, it is imperative that banks seek the right IT services partners not just to augment their teams but to co-create technology solutions and take them to market.
At the same time, IT services firms will need to remain cognizant of technologies being developed and requested by consumers so that both the IT firm and the companies they are serving can remain as competitive as possible.
As these changes occur, financial services firms will need to be aware that the more traditional way of engaging with IT services firms is not as beneficial in the modern age. According to the conventional mindset, a financial services firm may choose to solve a business problem itself, identify options, choose a technology solution, and then rely on an IT services firm to implement the solution. This linear assembly-line mode of operations is as outmoded as, well, assembly line factory work. Today’s generation believes in bringing together an eco-system of partners working in perfect harmony, to bring the most value to customers in the quickest possible time. This involves bringing partners, with complementary skillsets, to the table as early as possible into the discussion, and providing an open environment for the bank and its IT services partners to experiment, innovate and jointly arrive at a solution. The iPhone app is the symbol of the times, not the Model T.