Pub. 5 2016 Issue 9

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 12 INTEGRATING TECHNOLOGY INTO YOUR ENTERPRISE STRATEGY S EVERAL TIMES RECENTLY, a Board that I’ve done a strategic plan retreat for has commented that they’ve never before discussed operational matters in such depth. My reasoning is simple: technology has taken a lead role in the minds of bank customers. Many now choose to bank via electronic channels on a regular basis, some exclusively. Over the last two years, studies have shown that more customers use mobile devices for Internet Banking access than use a traditional desktop device. In order to exceed customer expectations, technology must be discussed and managed just as aggressively as every other business unit of the bank. While customers have driven this change, banks have in many cases struggled to keep up. I believe this is largely due to a gap between the business and the technology side of the bank. For too long, operations and technology have been an afterthought. The time has come for us to bridge this gap. Technology must be an integral part of your bank’s enterprise strategy. This will ensure that proper attention is given to the investment in, and management of, technology resources that will allow your bank to meet the needs of the customers of today¬—and tomorrow. When included, technology management can provide valuable insight into achieving the bank’s strategic goals. Proper management of technology includes attention to infrastructure, processing systems, and customer facing solutions. Infrastructure is so critical because it provides a solid base for technology. Telecommunications capacity, systems to ensure reliable power supplies, and properly functioning network environments are examples. When basic systems work well, solutions that are delivered to end users will be more stable, and the end user experience will be better. Processing systems include the software that you use to operate the bank. Whether a core accounting system, a loan or teller platform system, or software that tracks compliance, these systems provide the underlying accounting capabilities needed to support customer facing solutions including Internet, Mobile, Online account opening, and related options. Again, the stability and integrity of these systems goes a long way toward ensuring a good end user experience. Finally, customer facing solutions are comprised of delivery channels that enhance customer access to their funds, and account information. These systems will increasingly determine customer loyalty and profitability, as demand for self-service increases. To effectively integrate technology with enterprise strategy, CEOs must solicit input from the COO, and demand a business focus. Input can include plans for upgrading infrastructure, new technologies that may benefit the bank, and specific needs for internal productivity applications. A business focus means that operations and technology staff are able to clearly define the business value of proposed investments in technology and related services. Both sides will have a learning curve, as senior management and the board strive to learn more about the inner workings of operations, while operations staff will have to understand the business of banking in order to support it better. Once goals have been established, regular meetings to address progress, modify plans, or evaluate challenges, will increase the chance of success of this new venture. A bank that includes technology as a part of its enterprise strategy stands to gain a competitive advantage over those who do not. Trent will be presenting a session on this topic at KBA’s Bank Technology Conference and Showcase on February 15 in Topeka. Please see facing page for more information on the conference. About Trent Fleming Trent Fleming serves as a trusted adviser to financial institutions. He works with management on enterprise and technology strategy, and provides guidance into acquiring and managing technology resources. Fleming serves on the faculty of the Graduate School of Banking at the University of Wisconsin, The Advanced Banking School at Penn State University, and regularly contributes articles to industry publications. Read more on his thoughts about the industry at www.bankinginsights.blogspot.com Trent holds a BS in Economics and Finance from Christian Brothers University. He can be reached at trent@trentfleming.com. By Trent Fleming