The pace of digital transformation among financial institutions has only quickened in 2021—just as we expected. While the conditions of the pandemic solidified the need to develop simpler, more digital ways of conducting business, banks have moved to accelerate planned digital investments and to pursue long overdue upgrades to meet intensifying market demand.
While online banking platforms had become a mainstay in the industry prior to the pandemic, a recent report by American Banker confirmed that, across generations, an omnichannel experience is required for financial institutions to compete on grounds of customer experience and retention.
Online banking platforms are at the core of an omnichannel experience. While we see financial institutions approach online banking upgrades every seven to 10 years, the demands of 2021 have ushered in a new wave of upgrades by banks and financial institutions seeking to keep pace with consumer demand.
Given the heightened stakes, launching a new platform on time and on budget is more important than ever.
In our experience, banks typically underestimate how transformational these engagements really are. These implementation programs are expansive and require a considerable amount of planning and oversight to ensure their success.
Many banks approach these implementations as a project lasting six to nine months. In reality, these programs commonly become multi-year engagements due to a number of avoidable circumstances. The size and complexity of these implementations is vast.
If you’re considering an online banking upgrade, avoid these six common pitfalls:
A comprehensive, end-to-end program plan is critical to success. The identification of all dependencies (internal and vendor-related) is crucial to determining a path that holds teams and individuals accountable to their commitments and time constraints. Whether managed in-house or through a contract with an implementation partner, a full end-to-end program plan needs to be designed before beginning any online banking platform project.
The majority of financial institutions underestimate the need for this level of planning and expect their platform provider to provide it. These sample plans, however, either are never provided or don’t consider the full scope of the impacts and dependencies of the program. An integrated program plan should determine all risks to the scheduled timeframe and should be routinely reviewed and updated with the input and approval of key stakeholders.
Online banking platform implementations are expansive, and it’s crucial to begin such an engagement by clearly defining what a successful end product will look like. While many banks believe they’ve purchased a “packaged solution” from a vendor who will take the time to guide them through current best practices, most financial institutions are disappointed to learn the vendor expects them to conform to the solution’s processes regardless of whether they’re an industry best practice. Financial institutions also find they must advocate for themselves regarding what functionality is required and be prepared to change their processes where it makes sense to conform to the solution. Before designing and implementing a new digital banking solution, a multitude of factors need to be considered:
Stakeholders from across the organization need to be consulted to make sure their needs are being met
Requirements need to be gathered that address both current gaps and expected future capabilities
The trajectory of the broader industry needs to be considered in order to meet client expectations
Various customer types need to be mapped by creating representative personas and journeys that allow for further insight into needed functionality
With a set of comprehensive requirements fully cataloged, a corresponding testing strategy needs to be designed that informs how the platform implementation will be validated by end users. A well-designed testing strategy includes data validation and functional testing. Many rounds of mock data validation are required to confirm customer data is visible in the correct fields in the new digital platform. Functional testing includes creating test cases to qualify the application for functional fit, system stability, platform stability, usability, and performance.
An inadequate testing plan can mean a premature go-live, resulting in customers’ inability to transact business (imagine customers unable to process ACH transactions on payroll day or incorrect posting of transactions) and significant reputational risk. Taking the time to thoroughly conduct end-to-end testing is critical to the success of a digital online banking transformation program.
Given that these implementations are undertaken only once a decade or so, banks commonly lack the in-house experience needed to effectively manage and deliver the implementation within the desired timeframe. This is not only a lack of resource dedication but also of resource experience with this particular type of implementation engagement. Contracting with an experienced implementation partner can address a lack of in-house familiarity with such programs, bring best practices for functional process changes to the organization, and provide vendor management expertise to the ensure program success.
Even if the platform implementation itself is completed successfully, the overall impact of the engagement can be diminished if employees and customers are not advised and trained on how to best manage the transition to a new platform. Early and frequent communication with impacted parties is key, informing them as to the progress of the platform update as well as perceived impacts to their day-to-day interactions with the bank. Employees need ample time to familiarize themselves with the new platform before go-live, and they should know who to reach out to with questions on best practices.
Customers similarly need to be trained on how to use the new system and how to manage any integration changes that arise. Online banking platform implementations are large investments, and the best way to increase a firm’s chance of capturing the full value of such an investment is through an effective change management strategy.
Banks too often fall victim to the thinking that a single, “big bang” platform launch is the best way to reveal the upgraded solution to the public. Unfortunately, this approach commonly leads to crashes, bugs, and unachieved goals. Rather than opt for a “grand reveal,” employ an iterative platform launch that releases the implementation in various stages that allows for additional testing and validation while mitigating against unexpected functionality bugs and migration issues. Employees and clients would much rather see a slower rollout of a functioning system than a big bang launch of an unusable platform.
Banks that are the most successful with their online banking platforms preemptively address the concerns mentioned above, employing mitigation strategies that help adhere to original scope and timeline expectations. Effective program management can ensure a strong foundation that reduces timeline risk, optimizes overall budget, enhances the customer experience, and bolsters organizational reputation.
A well-executed online banking platform transformation can see a decrease in customer attrition, better employee engagement, increased share of customer wallet, enhanced market reputation, and overall client satisfaction.
A partnership with an experienced integration party can further strengthen the likelihood of a successful implementation and make such a vast and comprehensive execution exponentially more manageable.