New Banking Technologies Demand Fresh Innovation Strategies

Banks and credit unions that want to pioneer — or simply keep up — must stop clinging to old ways of deploying talent to drive innovation. Thinking like a fintech demands flexibility at the team level, right down to the role of every participant.

Throughout history businesses have had to learn to adapt to new technologies or languish, and this holds true for banks and credit unions more than ever before. Today financial institutions confront an accelerated pace of change, rising consumer expectations, and the demands of an evolving workforce.

Change is inevitable, under today’s circumstances and given the alternative. But which way does the institution go when faced with the flood of circumstances necessary to address? Modernizing delivery of banking services represents broad challenge on multiple fronts. Where do you start?

The following five best practices can help ensure the successful adoption of modern delivery.

1. Invest in Cultural Change Before You Change Anything Else

Most financial institutions of size have large organizations within IT and project management groups supporting their renovation portfolios. These functions compete and overlap. They often rely on traditional ways of developing new delivery channels.

A shift to modern delivery is an enormous cultural change for many financial institutions. In order to benefit from modern approaches to financial services delivery, the whole organization must transform. All members of the organization must learn new, and preferred, ways of perceiving problems and challenges in development and dealing with them.

The transformation needs to begin by changing the culture of the management team itself. So the first step is to gain executive managers’ buy-in. For change this significant to occur, senior leaders of the company need to visibly adopt the agile values, mindset and behavior desired for the rest of the institution’s staff.

2. ‘Shift Left’ to Focus On Quality Of Transformative Projects, As Well As Products

Financial institutions have traditionally taken a tactical approach to testing — using software developers to detect defects at the end of the software development process. However, this approach is fundamentally flawed, and results in costly errors. It’s like not watching the road signs so that you don’t realize you missed a key turn until you wind up in the wrong state.

Realization that validating accuracy can’t wait until the end of a project lead to the “Shift Left” concept. Basically, it refers to a practice in software development in which teams focus on quality and ongoing work on problem prevention instead of later detection. Testing begins early and occurs often. The goal is to improve quality, shorten test cycles, and reduce the possibility of unpleasant surprises at the end of the development cycle — or even worse, once the new service or feature has been released for public use.

This change is critical because the goals of new product development shift continually today. The financial institution’s team may learn of a new wrinkle in consumer needs. So it’s critical to shift the mindset of the team to testing early and throughout the process.

Read More:

3. Fund at the Team Level Instead of the Project Level

Financial organizations have relied on traditional project funding and project management methods for decades. These methods are often perceived as complex and bureaucratic, but they have been effective for traditional initiatives.

However, when moving to modern delivery and agile development, many financial institutions don’t go as far as they need to. They typically form teams yet keep their traditional project-based funding structure in place because that’s the way they’ve always done it.

Changing from a traditional framework to a modern delivery model means that funding and planning functions must change. This new approach can be summarized as funding people over projects.

Webinar
REGISTER FOR THIS FREE WEBINAR
Top Digital Trends Every Financial Brand Should Use
As financial institutions build digital strategies to elevate customer or member experiences, organizations are racing against their competitors for greater sophistication via technology.
Tuesday, december 17th at 2pm EST

4. Embrace Change and Also Failure

“Fail fast” is an agile philosophy that values extensive testing and incremental development to determine whether an idea has value. An important goal of this “fail fast, succeed faster” philosophy is to cut losses when testing reveals that something isn’t working. Failing fast seeks to take the stigma out of the word “failure” by emphasizing that the knowledge gained from a failed attempt increases the probability of eventual success. This fits with the idea of funding teams, rather than projects. The end product may not be what the team originally set out to create.

Conducting retrospective examinations of development and taking these post-mortems seriously is a surefire way for management to get comfortable embracing failure and trusting their teams to do their jobs. Such discussion should create a safe, blameless space for team members to share their honest feedback on what went well and what could be improved for next time. When done well, these agile meetings can highlight opportunities for change, generate meaningful process improvements, and ultimately move the team in the right direction.

5. Develop Cross-Functional Teams for Ultimate Flexibility

A critical success factor in transforming a financial institution firm’s delivery scheme is the migration of current fixed roles into agile roles. Staff at all levels must accustom themselves to roles that change. Sometimes these are “battlefield promotions” — individuals who have never written code may be asked to function as a developer. To succeed, all players must be provided appropriate training to equip them for such agile roles.

This article was originally published on . All content © 2019 by The Financial Brand and may not be reproduced by any means without permission.