In our first blog post we discussed the trends that are shaping the small business banking evolution well underway. This post will focus on what we all can be doing to address those trends and how to better position ourselves to continue to evolve as the pace of change continues its acceleration and threatens to leave many banks in its dust.
The six actions you can take today:
Work on setting a foundation to be able to adapt rapidly. There is one certainty in our industry, it’s that change is not going to stop, it’s only going to continue to accelerate. So one thing we can be sure to do is focus on making sure we have solutions in place that will enable us to rapidly add functionality or capabilities or endpoints. I am not saying go out and rip and replace, but rather focus on areas where you can work with heritage applications in a way that enables changing out applications down the road (think dual speed innovation capability).
The next thing we can do is embrace a start-up mentality of Fast Fail Models. Agile isn’t just a development methodology it is also a product management methodology. To constantly be able to handle change we need to be ok with failure. I am not saying that we need to create a full on product, launch it then realize it fails, but if you think more like a startup you can create minimal viable products (or product packages) that become potential new revenue streams for your Financial Institution.
Which brings me to the next point, we need to Re-Think “Products” and focus on creating “Solutions”. I think we are at a point today, especially with the emergence of Open APIs, of having the ability to truly sit and break “products” down today and re-connect them and deploy them differently than was previously possible. Many of the products we have are based on the heritage processes of the bank, many of those processes were defined in a pre-technology based world. We need to sit and rethink this as an industry and focus on what the customer truly needs, not what legacy banking products we support today and that includes payments of all types (which have already started changing.)
Next on my list is enjoy playing with New Tech! It is always hard to adapt to change and technology is one of the hardest to keep pace with, but playing with tech is the best way to start thinking of potential. Teams should have access to fun tech and my hope is that we all start having product “hackathons” or ideation sessions based on new tech where we start to think as product what would be cool and work on the assumption the technology side is already there to support the ideas. This is that opportunity to collectively put our heads completely in the clouds!
This next point is a continuation of that thought, now is the time to start playing in the sandbox and rolling up your sleeves – Financial Service organizations need to get their hands dirty with new tech like Open APIs now. It’s also important to remember that Open API is more than just a technology. It’s a way of working and a way of doing business
Consumer trends will continue to drive commercial banking trends. As an analyst at Greenwich Associates I always told my clients that the consumer market was about 5 years ahead of the business market. I would argue that if anything that gap is closing to something closer to 3 years. The emergence of the importance of the small business market and its affect on business banking applications has pushed us harder on adapting to simpler/easier workflows. My advice is that we all need to keep an eye on what’s happening in the consumer market as it will continue to drive trends in the business market (small biz especially).
So what are you waiting for?