SRM’s recent report makes the case that banks and credit unions of all sizes need to develop a fintech blueprint – an actionable, comprehensive strategy to address industry evolution. In a previous blog, we outlined some recent innovations – open banking, real-time payments, and embedded finance – that should serve as a call to action.
In tackling these challenges, it makes little sense to bolt a new system onto legacy operating processes. Let’s consider a few steps financial institutions can take to prepare and establish an environment for success once the fintech blueprint moves on to the building stage.
Put Yourself in the Customer's Shoes
The “customer journey” is a popular buzz phrase that refers to mapping out the steps a customer may take – and the touchpoints they may encounter – in any FI interaction. These may involve a consumer deciding whether to open a new account or the moment when they’re shopping for a mortgage or auto loan. It may involve an existing business customer making a nightly deposit or setting up online portal access.
Payments remain one of the primary user interactions driving these experiences and, by extension, customer satisfaction. Expectations are being set by the seamless digital and hybrid experiences becoming commonplace in settings outside of financial services.
FI leaders should closely examine examples like order-ahead and one-click shopping to inform their engagement models. Often, this will require enhancements to back-end capabilities such as core banking, which become a central component of the blueprint.
Select, Align, Execute
A critical early step in the fintech blueprint involves determining your FI’s ecosystem focus, including the partners you wish to work with to expand your services. These partners will be valuable sounding boards for setting timelines and validating other decisions along the journey.
As you evaluate partners, be diligent about selecting products that align with your desired customer journey and your strategic roadmap for IT capabilities and the technology stack.
Next comes an essential but often overlooked step – aligning the organization and the customer journey. Before determining whether it makes sense to develop platforms in-house, partner with third parties, or pursue acquisitions, be sure to understand your existing capabilities. Conducting an employee talent and skills assessment can be an important part of the process.
Once you understand your FI’s direction and needs, it’s finally time to execute. Identify and hire the developers and tech talent needed to embark on the journey. Recent tech sector layoffs could provide hiring opportunities that seemed unlikely a year ago.
Finally, don’t treat this as a one-and-done process. Periodically refresh your assessments to identify functions and areas where your FI may fall behind due to vendor constraints or market advancements. Explore options to eliminate any dependencies or gaps.
The Bottom Line
The fintech landscape is evolving so rapidly that all banks and credit unions need a detailed blueprint documenting their approach to technological opportunities and challenges.
SRM’s new report – Why Every Financial Institution Needs a Fintech Blueprint – is an excellent primer to help jump-start such an initiative. Don’t shortchange the upfront steps of setting the table that will improve the probability of long-term success. We welcome the opportunity to discuss the process of building a fintech blueprint with you.