It’s no secret I spend a lot of my time talking to people that are in the weeds of projects related to meeting specific functional or regulatory requirements. By finding out the details of where institutional pains are emanating from, I’m better informed as an analyst to identify where approaches can improve and technologies can be deployed. But another important aspect of my work is seeing the bigger picture – understanding how one functional area can impact another, connecting the dots between silos, getting the perspectives and identifying the priorities of the line of business heads and C-suite executives. We need to examine the coal face view alongside the 30,000-foot view to really appreciate how FinTech can make a difference.
To illustrate this better, maybe I can provide an example of how you can join the dots and see where inefficiencies in one area, end up causing costs and pain points in another. It’s no secret that poor data management and the lack of a robust data governance programme result in a lot of pain points for a firm overall. But do we often look at how this correlates with specific areas such as spending on reconciliation? How much more data clean-up is being done by reconciliation teams and technologies as a result of poor data management? If the firm deployed a new approach and potentially a new technology platform in one area, how much time and resources could be saved in another?
As an industry we need to get better at joining these dots. I see too many project successes or failures being judged on a limited set of criteria. Often, we judge implementation success on whether timelines and budgets were hit, rather than the impact over time that the implementation has on the function. Even when we look at institutional impact, we tend to judge things on metrics such as employee headcount within that specific function and don’t look beyond to the other areas of the business that may have benefitted. If your front-office team spend less time chasing down information, how much more time do they have to pursue more value-additive endeavours?
Cost savings are certainly important, especially in an economic downturn, but they aren’t the only benefit provided by investment in operational areas. Time and time again, I ask the question – how did you measure the project’s success? And I receive an answer that focuses on headcount reduction or vendor platform consolidation, but no mention of metrics related to other benefits outside of the involved functional silo. If we’re to move to a more proactive approach to FinTech and digital transformation, if we’re to hold our critical vendors to account, we need to get better at measuring impact at the end of the implementation and well beyond that point. And that impact isn’t just to the function within which the new technology has been deployed or programme of work has been carried out, it’s to the business as a whole.
After all, business cases for continued investment are that much easier to prove when you’ve got the attention of the C-suite and their priorities in mind.
While I have you here, do remember that I’m benchmarking the reconciliation space, so please do participate in Firebrand’s assessment here: https://virginie732560.typeform.com/to/cLuOtEqq
Every financial institution participant will get a copy of the industry benchmark stats for their time and all data is aggregated and anonymised.