Fintech or Financial Technology services are among the most high-tech companies in the world. That statement is perhaps more wishful thinking than it is reality in some instances. According to Bill Streeter, Editor at The Financial Brand, “When it comes to digital transformation in the banking industry, the Holy Grail is to have a culture of innovation embedded in the financial institution’s DNA. Few do yet, but banking providers at least appear to be making progress.”
Most credit unions and banks know that they are well behind in the game so most of them are currently working diligently to boost their investment in fintech. Many, if not most, say that they believe they will achieve myriad gains and benefits by the implementation of higher levels of fintech.
Experts in the field warn that just adding a few digital projects and implementing a few changes is not true transformation and certainly should not be confused with that. Nor, should financial institutions expect to see massive benefits from the implementation of just a few programs.
According to Streeter, becoming digital first is removing some of the major threats to their institution and also is a “clear path to increased profitability.”
The problem is that, according to a study by BDO, nine out of ten financial institutions in a survey state that they are planning their strategy with many being only 10-20 percent invested. About 1/3 of financial institutions admit they are still formulating a strategy that is clearly a long way away from the implementation.
Planning means nothing without implementation and live use.
“Without a strategy, it’s easy to get lost in the weeds — wrapped up in a variety of digital projects that may, or may not, actually get you where you want to go,” says BDO’s National Digital Transformation Services leader in the Technology and Business Transformation Services practice, Malcolm “Chip” Cohron. “The mistake we often see financial institutions make is confusing digital implementation with digital strategy. An implementation project should deliver immediate ROI, but it isn’t, in and of itself, transformational. It’s only when all of these projects lead to a bigger goal that digital transformation is truly effective.”