By Franco Severini, CTO for Financial Services at Fujitsu
Customers expect immediacy from today’s financial services. They want to access their finances at any time and from any location. It’s a step-change, particularly for legacy banks entrenched in long, traditional processes, but it is one that must be made.
Fintechs have proven to customers that banking services can be provided instantaneously and with ease, which has set expectations. In response, traditional banks have needed to integrate technology that will enable them to offer the same competitive user experience.
And the pressure on legacy banks has unsurprisingly mounted during the transition to remote working. Those who tried to keep traditional banking practices alive were forced to adopt digital banking due to pandemic restrictions. And now, these once sceptics, are embracing the experiences fintech offers.
This change in consumer perceptions has made technology critical to achieving the speed and agility traditional banks need to compete with these younger, digital-first brands.
However, tech is just one component of this success. Fintech is completely redundant if it’s not implemented within an empowered culture that can see the benefit and are willing to use it.
Essentially, it means a bank’s culture must be prioritised as much as fintech is during the transition to a digital banking model.
Nurturing a culture of success among banking employees
The success of a bank’s fintech is dependent upon employees using it effectively. To do this, staff must understand the value, feel they’re contributing to something important within the company and feel supported in learning new skills to support fintech.
By including employees within the entire implementation process and beyond, banks will be able to ensure employees can see first-hand the benefits of fintech. It’s important here to gather feedback from employees to guide how the culture can be supported further and ensure employees feel listened to.
An empathetic approach is key here, and will determine how many difficulties you encounter when rolling out new processes centred around fintech. For example, it will be a lot easier if everyone knows what to expect and what is expected of them, as opposed to rolling out fintech in an environment where nobody understands and feels hesitant towards change.
There may even be a degree of education needed around job roles. Unlike in previous times, technology is no longer a responsibility siloed to the IT team. As fintech touches every aspect of a business, the responsibilities to maintain it and manage information spill out across the entire business. It means the shape of job roles as employees currently know them are changing, which warrants a moral obligation from banks to dedicate time to upskilling staff.
Ultimately, a bank’s culture is fintech’s foundation, so it must be strong. Banks should dedicate time to curating the right environment, even if it’s at the expense of short-term revenue gains. Bypassing this crucial component of fintech adoption could lead to much more expensive repercussions and limited progression.
Testing for success
In most cases the fintech boom within legacy banks will require revolutionising business models. Such immense change can be challenging for a business’ culture so it’s important that banks are certain on the approach they will take to fintech adoption before they roll it out fully.
Testing out digital business models beforehand by using a regulatory sandbox can minimise the stress and disruption a banks’ culture experiences in the move towards fintech.
As such, the Digital Sandbox Accelerator is a safe space within the financial services industry, as it shows how a solution would perform once it has been fully integrated into the bank’s ecosystem – highlighting how new innovations would run or perform within existing frameworks. This option has become increasingly popular in the financial services industry, especially as challenger brands like Monzo, First Direct and Starling continue to steam ahead with their fintech innovations.
Fintech enabler framework
As we’ve ascertained, having a supportive culture is vital to legacy banks hoping to adopt fintech. I think a big part of this is making sure employees trust their employer’s decision to adopt new ways of working and alter processes.
As there are so many elements of change within a project of this scale, a fintech enabler framework can provide the guidance that employees need to feel confident in the changes happening around them.
Essentially, this framework should outline what the banks’ approach is (something that will hopefully have been ascertained during the sandbox stage). In addition, it should also pinpoint the processes, set expectations for the skill sets needed, and encourage innovation. Adopting a framework such as this will clearly direct your culture to one set up to embrace a fintech mindset, even in a traditional banking brand.
While technology may appear to be the catalyst to progressing legacy banks into the next era of the financial services industry, fintech is just a tool. The people behind these tools are the ones making the real change, and I urge you to empower them. Otherwise, your brand new fintech will have no one to implement, maintain, and innovate with it.
