David Metz is the Founder & CEO of Prizeout, an adtech company based in New York City.
As technology continues to grow at a rapid pace, more and more large financial institutions are turning to up-and-coming tech vendors to help them deliver cutting-edge financial services. And while I’ve witnessed many of these partnerships proving to be incredibly successful, several have needed help finding their footing.
Why is that? I find that it typically boils down to one thing: Communication. Due to miscommunication—that is oftentimes completely avoidable—banks and tech companies may not be on the same foot from the start. And this disconnect only widens as the partnership continues.
From my experience as the founder of a tech company that partners directly with credit unions and banks, here are five questions banks can ask their tech vendors to avoid a potential hiccup,
1. How Can You Use Data In Ways that We Can’t?
One of the biggest strengths of banks is their ability to seamlessly collect rich data. But what actually ends up being done with this data can vary depending on the scale of the institution. Many banks have run into the issue of using services that were built before the industry realized the importance of this data, making it difficult to implement retroactively. Alternatively, in the case of many community banks, they simply may not have the resources necessary to make use of this data.
On the other side of this partnership, the primary strength of the modern tech company you choose should be knowing how to use this data to drive results. Ask them in what ways they will delve into what your bank’s customers want and adjust their platform to more precisely meet these needs. Overall, when beginning a discussion with a potential tech vendor, it’s crucial to understand exactly what they can do with your data that you aren’t already capable of doing yourself.
2. Can You Help Us Meet Our Customers’ Expectations?
The word “expectations” can drive fear into the hearts of many, even outside the business world. Customer expectations literally never stop growing. They’ll always want something faster, easier more digital, etc. But again, many banks don’t have the time or resources to continue to meet these expectations. And it doesn’t help that in today’s environment, customers are not just comparing banks to other banks. They’re comparing them to big names like Amazon, Google and Apple, making it even more challenging to compete.
In order to more effectively meet some of these expectations, many banks have found success partnering with fintech companies. But it’s essential, in these conversations, to know exactly what your customers’ expectations are and receive clear answers from potential tech vendors about the ways you can meet—and hopefully exceed—them.
3. What Is Your End Goal For This Partnership? What Does Six Months From Now Look Like?
While it may seem like a basic question, it’s honestly unbelievable how many partners are not upfront with each other from the start about what they hope to gain from the partnership. Without clear communication from both sides about their respective goals, the partnership as a whole could be in jeopardy.
From the get-go, don’t hold any punches when having these discussions. Be clear and concise in order to ensure that the end destination for both sides is the same. Otherwise, you risk wasting valuable time and resources on the partnership only to realize after it’s too late that you want two completely different things. If the solution isn’t capable of aligning with your goals, it’s best for both the bank and the tech vendor to move on and find a better fit.
4. In What Area(s) Are You Better Positioned Than Us?
It helps to know your strengths, but sometimes it might be even more helpful to recognize your weaknesses. If potential partners can identify these weaknesses and bolster them, it could be a sign of a strong partnership. For example, many banks—especially community banks—tend to want to focus on things like financial education for their customers. However, tons of these institutions find themselves lacking the ability to do so. This is where tech companies can step in and help promote these messages to the masses.
This thinking doesn’t stop there, though. It applies to both sides of the equation. Think about how the vendor may not be best equipped to get what they want and how you could step into that void. Both sides have strengths and weaknesses, but the right partnership can make them both even stronger.
5. How Can You Help Us Engage With And Attract Younger Members?
The only thing more important than the present is the future. So, when introducing new products and services through a tech vendor, you will want to ensure they can attract as many Millennial and Gen Z customers as possible.
When looking for a partnership to ignite interest with these younger generations, knowing what to look for is crucial. They want everything they do to be fun, engaging and, perhaps most importantly for the banking world, rewarding. I’ve found that fees and rates alone don’t matter as much to these younger generations as they did to those prior. Instead, they operate on a more quid pro quo basis. If they bank with you, what’s in it for them?
When searching for a new tech vendor, you want someone who can help you on all fronts. Search for a vendor who isn’t afraid to step outside traditional channels and meet these younger generations in their own space. Someone who recognizes that younger generations are thinking about even the most basic banking functions, like paying bills, entirely differently. Because, if you can’t find a way to catch their eye now, it will only get more complicated as they grow and build loyalty with other institutions.
So, if you are a bank considering a partnership with a tech vendor, make sure you are getting the most out of it by setting the expectations and standards from the start. I’ve found that posing these five critical questions can help lead to a smoother and more successful business relationship.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Read the full article here
