It’s no longer just IT’s job. A working knowledge of technology is a skill every employee at a financial institution needs to have, say bankers who are focused on training and collaborative learning at their institutions.
Technology is a crucial variable in the strategic plans at many financial institutions, fueling how they’ll grow or become more efficient. Institutions that expect to use more technology in the future need to consider the staffing they’ll need to run that tech, along with the skills of the employees who will use it. Cultivating tech talent in roles across a financial institution — not just in information technology — may make it easier for institutions to maximize their major technology investments. Failure to invest in tech talent and skills can also contribute to major strategic risks and restrict how financial institutions use tech in the future, they say.
“If you’re making a major investment in [lending software] or another large platform, you are no longer just buying something and running it; you have to understand how to maximize the value out of it,” says DJ Seeterlin, SVP and chief innovation strategy officer at Chesapeake Bank, a unit of $1.5 billion Chesapeake Financial Services in Kilmarnock, Virginia. “It’s an ongoing investment. It’s not just what you’re paying a vendor now, it’s investing in people, their upskilling and the time needed to manage it.”
Traditional IT groups are still very much focused on maintaining the security and integrity of an institution’s infrastructure, network, security and storage configurations, but tech applications go far beyond that.
Integrating and effectively using software, data analytics and automation technology into business lines means that all employees need to have a functional and growing understanding of technology. Brad Smith, a partner at Cornerstone Advisors, uses the proliferation of data analytics as an example: technologists on a marketing team can incorporate data analytics to better target customers for products. Tech-savvy employees on the finance team can use business intelligence software to generate reports tracking metrics, rather than requesting and compiling the information from various team members.
“Banks need technology executives that understand the numbers, but they also need their business folks to think a little bit more like technologists and ask questions like ‘What are we getting for that? Do we need a new widget or can we get more out of our existing tech?’” Smith says.
The technology strategy and road map at $5 billion Choice Financial Group in Fargo, North Dakota, focuses on integrating services and capabilities to offer experiences for customers and employees that are different and better than peer institutions. It also wants to use data in decision-making, says Shikhar Singh, the bank’s EVP and chief technology officer.
Some of Singh’s direct team works as decentralized business-aligned technologists, designing solutions within business units and developing team members who have overlapping business and technical skills. This approach combats the silos that can sometimes form around technology personnel, while increasing the tech knowledge within the cross-functional team.
“You can be technology savvy and still not be a technologist,” he says. “You don’t have to write code to be technology savvy.”
Choice Financial Group a unit of Choice Financial Holdings, has also introduced roles such as “solution architects,” which Singh says help design cross-functional solutions while considering the impact from a customer’s perspective. These individuals need to understand both a business line — such as lending, payments or fraud — and the technology that can support that business. They work with people in the business line and on the technology side to craft solution blueprints that others can execute and integrate.
One easy way banks can increase the technology knowledge at their institutions is by investing in updated training for the existing technology a bank already uses, Smith says. Bank executives may not realize the software their institution uses has received major updates because they don’t keep up with the developments and training. As a result, executives or employees may believe the software is outdated when it is underutilized.
“We spend a lot of time, energy and dollars training on new systems, and then we’re off to the next system,” Smith says. “But banks don’t spend the time keeping folks current on the stuff they bought several years ago.”
Going forward, investing in tech talent will be an increasingly important consideration for many institutions when they consider making major software investments. This can include incorporating the cost of hiring or dedicating an employee to manage these software systems to ensure they’re being used to their fullest capacity, says Seeterlin.
He speaks from experience. Chesapeake Bank was exploring a project several years ago and the vendor said they would need to dedicate an employee to manage it. The bank thought its existing IT staff could manage the work and decided to invest in the project. Six months into the project, they realized the vendor was correct. By the time they hired someone and installed them, the bank had lost a year of that investment.
“That was a painful lesson,” he says. “If you can’t afford the people to manage it, then maybe you can’t afford the systems in the first place.”
He says the bank had to change its mindset around major tech investments. It doesn’t assume its IT team will manage these major tech vendor partnerships, but instead considers the additional talent investments and ongoing training the bank needs to fully utilize the technology.
“The days of technology expertise being [the domain of] the IT department has long since passed,” Smith says.
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