Banks are spending millions on technology every year and upgrading their cores, adding digital onboarding for customers and embedding artificial intelligence into workflows, yet many still struggle to realize a meaningful return. Why? Because technology is only as good as the people and processes behind it.
Misalignment Undermines Return
Many banks fall for the “Field of Dreams” fallacy that “If you build it, they will come,” says Aaron Donaldson, a principal at consulting firm RSM US. “Unless you get employees involved early, and explain why it matters, they’ll just recreate bad processes in new systems. You’re going to beat your head against the wall.”
Even previously implemented tools can fail to meet expectations, not because the product is flawed but because institutions never fully aligned their people or processes to use them effectively, Donaldson adds.
This scenario plays out frequently with major core systems. “Vendors are going to keep producing upgrades every year and, in most cases, banks install them, but they don’t take the time to evaluate how it can improve the organization,” says John Macaluso, chief operating officer at Smith Consulting Group. “A few years down the road, they’re only using it for a slice of its capability and they end up saying the upgrade doesn’t do what we need it to do.”
It is critical to make sure that frontline staff and middle managers understand what you are trying to accomplish with new technology and how they benefit the bank, those advisers say. Often, those employees are the most reluctant to change.
“The senior leaders understand that the bank has to move forward, and the middle management folks are the ones tasked with execution and have to be the champions,” Macaluso says. “When middle managers throw their hands up in frustration, the project just dies. Financial services, and particularly banking, is in need of some significant disruption in the back office.”
With the increased cost of labor, manual processes can be expensive. “We used to throw two or three $40,000 employees at a problem,” Macaluso said. “Now those roles cost $80,000 to $110,000, and you can’t afford for them to be executing manual workarounds that should be automated.”
One way to address engagement is with open discussion about where the industry is headed and why innovation is critical to long-term success. “It starts with communication, and it ends with communication,” says Rob Armour, chief marketing and product development officer at BankPlus in Ridgeland, Mississippi. “I try to be an advocate by explaining why we’re doing it, showing them the math and why it makes sense. I might spend more time explaining to our frontline what the reasoning is for the change than I do discussing the change itself.”
Securing Buy-In
Technology is often rolled out without proper framing and employee support. The stakes are even higher as regulatory pressure and real-time banking expectations mount.
To that end, employee involvement is critical to successfully implementing new technology, Donaldson says. “Getting your team involved at the adoption, configuration and design layers so they understand how the changes will benefit them increases the chances of them wanting to roll their sleeves up and use it for that benefit,” he says.
Framing is baked into how the $8 billion BancPlus Corp. introduces new products to its teams. When the bank rolled out value checking accounts with embedded perks like cell phone protection and roadside assistance, it didn’t just train its employees to sell them — it gave them the product as part of their benefits package.
“If employees use it themselves, they can speak about it with credibility,” Armour says. “We’ve been doing this for eight years, and it works.”
Still, even the best communication strategy can fall flat without the right key performance indicators and aligned incentives. Donaldson shares a case where a bank spent millions on a customer relationship management system, yet its business developers kept doing everything by email.
“There was no financial incentive to use the system,” Donaldson says. “Eventually, the bank had to make it mandatory for commissions.” Donaldson also recalls a help desk situation where the IT staff were rewarded for the number of tickets closed regardless of whether they were resolved.
“They would close the ticket quickly, but the problem wasn’t actually fixed,” Donaldson says. “We changed the metric: They still received one point for a closed ticket, but they lost 50 for every reopened one. There was now an incentive to not only close the ticket, but to do it accurately.”
Evaluate Before You Integrate
Another recurring theme: Banks rush to buy tech before addressing the root procedural problems.
“We looked at a bank with a digital account opening tool,” Donaldson says, “but they were still using paper forms that had to be scanned and manually entered. They ended up with a really fancy engine, but the data didn’t go anywhere.”
BankPlus spends considerable time game planning before adding new technology. “Let’s figure out who our target market is and what we want to do,” Armour says. “We start with the basics, and we may change a dozen workflows to get to where we want to go.”
Artificial intelligence is another area that is dependent on functioning workflows, particularly when it comes to the data being fed into the program and the personnel tasked with interpreting the findings on the other side.
A large majority of AI initiatives are failing right now, Donaldson says. “Do we really believe that [the AI is failing] or do we believe that the implementation of the AI is a failure? It’s the latter.”
The odds of success improve when banks designate an individual, whether it is the head of innovation or strategy, to oversee buy-in and implementation and own the tech adoption mandate. “While it’s important to get feedback and have multiple fingerprints on a project, leaving innovation to be handled by a committee adds a little bit to the failure,” Donaldson says.
How To Find Success
Technology is no longer a back-office expense — it’s central to customer experience, regulatory compliance and profitability. But its success hinges not on what banks buy, but how well they prepare their people and processes to use it.
Too often, banks race to deploy new platforms without first confronting internal fragmentation, leading to inconsistent adoption and underwhelming returns. Success with technology starts well before implementation: It requires clearly defined roles, cross-functional collaboration and buy-in across the enterprise.
“The bottom line is that technology and innovation are expected in this industry, so you better make sure you’re getting the most value out of it,” Donaldson says.
Previous