Despite current economic conditions, innovative banks are avoiding cuts to their tech budgets. However, many banks are still hesitant to venture away from their core providers and form relationships with other technology vendors. Investing in technology can help community banks improve efficiency, reduce operating costs, and reach more customers with an improved customer experience.
Tight budgets and economic uncertainty create even more pressure to make the most of your technology investments. What are some key factors that community banks should consider when vetting technology vendors to ensure the relationship is going to be a good long-term fit?
It All Starts with Strategy
The most successful businesses have clearly defined goals and desired outcomes that shape their business strategy, which in turn should set the foundation for your innovation and technology strategy. When the entire institution is on the same page, you know exactly what issues need to be solved and which solutions are the highest priorities.
It's essential to consider the vision and strategy of potential vendors as well. By asking vendors about their own goals and vision, banks can get a better sense of what drives the company forward. Partnering with vendors whose vision aligns with your needs and whose goals are in sync with your own will help ensure you are choosing a vendor who is dedicated to your team’s long-term success.
Configurable vs Customizable: Which is the Right Solution for Your Business Needs?
It's important to discuss the level of customizability and configurability a vendor can offer.
Custom code may sound appealing, but it comes with risks, high cost, and limitations. It will take an intensive amount of time to get the project off the ground and into production, and it is difficult to make changes as you go. It also can’t scale or adapt to industry needs as quickly as a product with one code base.
Some banks find solutions that offer no customization or configuring better suit their needs, especially if they lack internal resources to create a unique flow or process. Many banks are somewhere in the middle—their ideal solution provides customizability so they can fine-tune to their specific operations or adapt quickly to changing industry needs without the price tag and constraints of custom code.
Ensuring Long-Term Reliability
You want to ensure you’re choosing vendors that can support you long-term, but the age of the company is not a good measure for this. Legacy systems are often outdated and lack innovation, but with new tech you’re taking a chance on their longevity and stability. What other questions can help gauge if they’ll be around for the long haul?
- Ask about the vendor's technology roadmap, recent innovations, and where they're investing in R&D. This will give you an idea of how committed they are to improving their solutions and staying up to date with industry demands.
- If applicable, ask how the vendor responded to events like the Paycheck Protection Program. Did they step up and provide support to their clients during this crisis? This can be a telling sign of their dedication to their customers and how quickly they can keep up with market demands.
- Although it is preferable to find a “one stop shop”, there really is no silver bullet in the marketplace, and it may take two or three vendors to achieve your desired outcome. Discuss their willingness to integrate with other third parties and potential competitors to determine limitations when building your tech stack.
- How will the vendor adapt to industry changes and scale with your business?
Understanding the Customer Experience—What’s it like to be their customer?
Your experience as a customer should be a top priority when choosing a vendor—it is key to a successful partnership. You cannot base your expectations solely off of the relationship you have with your sales representative. Ask questions that provide insight into how happy they keep their clients.
Ask about support services and account management practices for implemented clients. How accessible and responsive is the support team? How are accounts managed, and how often do they meet with clients? It's also worth inquiring about the company's churn rate--this can be an uncomfortable question, but it is the core metric of client satisfaction.
If possible, optimize your reference calls by speaking with clients who have a similar tech stack—core, imaging systems, or other vital solutions. Each interaction with a system is unique, so hearing the experiences of banks with similar operations or goals will allow you to ask more targeted and specific questions.
As you search for solutions, you will undoubtedly vet many vendors. Asking the right questions during the discovery process can make all the difference in your long-term partnership success and return on investment. Save yourself time and future headaches, and enter the partnership with complete confidence you’ve made the best decision.
If you'd like to continue this conversation or are considering a partnership with Teslar, you can reach me at firstname.lastname@example.org.