Banking technology is one of the biggest investments keeping your institution in business. And, when we talk about technology, we’re referring to more than just the core. Technology is the entire infrastructure powering the front and back-office operations, from something as small as the bank’s email platform to the servers and data centers housing all of the bank’s customer data. Whether it’s software, hardware, or the cloud, we are highly dependent on technology to work when we need it.
The problem is there’s a lot of old, broken technology out there that is no longer benefiting the bank and, even worse, there is little to no support to get the bank to a higher performing state. With technology evolving at a rapid pace and fierce competition embracing innovative solutions to grow their business, a community bank cannot afford to have the wrong person or company managing their technology. Learn what it costs when your bank doesn’t have the right technology expert by its side.
The Wrong Person for the Job
If your bank has one of the following people or entities in charge of your IT, chances are you’re not seeing the performance in-house that you should, and your bank could be at risk.
- Third-party IT companies – Community banks often partner with third-party IT companies to manage their networking, system installations and updates, and even their website hosting and maintenance. Many of these IT companies are not exclusive to the banking industry, so they may not be aware of all the compliance requirements that a financial institution needs to fulfill. This can increase your compliance burden and possibly lead to issues with regulators.
- Internal bank staff – To save on costs, a bank employee may often take on the IT role internally and wear multiple hats when trying to manage bank operations as well as IT services. However, many banks that bring IT in-house don’t realize the crucial responsibilities needed to fulfill the role. Modern IT complexity and the speed of technology, along with new digital products, and increased cybersecurity threats make it critical for anyone in IT to stay current on trends, regulation changes, and compliance. Often temporary fixes and patches are applied which only create a pressure valve of stacking issues. For the bank to avoid disruptions to service, an experienced IT professional must proactively monitor system performance and conduct routine maintenance. Avoiding doing so can cause more issues and require the bank to spend more time and resources diagnosing and repairing problems later on, costing you even more than what it would have to hire an expert at the beginning.
The Costs of Managing IT Without the Proper Expertise
Time and money are the assumed costs for enlisting IT services. But did you know there are also indirect costs when your technology falls into the wrong, inexperienced hands? All of the following outcomes affect a bank’s success in the long-term.
- Limited growth and revenue opportunities – When your bank is not performing optimally with the tools and technology it has in place, it impacts your bank’s ability to grow. For example, if your bank does not have a secure email provider, it may have to rely on mailing documentation or asking customers to come into the branch for a signature. Either of these options cause delays in receipt and processing, and at times frustrations for the customer. Sending a secure email expedites the process, reduces paper storage and waste, and keeps your customers happy. Work with a vendor that offers solutions for both customer acquisition and retention, so you can continue growing your bank regardless of the climate.
- Impact on customer retention - Has your bank ever experienced downtime or a service disruption? When this happens, not only does your bank harm its reputation, it loses the trust of your customers, which puts a hole in your pocket for existing and future business. Think of major legacy vendors whose servers went down and left customers without access until systems rebooted. It happens frequently in the industry, but doesn’t have to. Work with a vendor that keeps your system current and updated at all times and has a valid business continuity plan in place with fail safe procedures in the event a natural disaster or cyber incident.
- Increased compliance risk – Whether it’s working in a lagging system or with an IT vendor that is not experienced in banking, your bank has a significant risk for compliance violations. A vendor that doesn’t regularly monitor and update your technology can leave your bank vulnerable to cyberattacks, data loss, and even system shutdowns. Suffering from a data breach or cyberattack can paralyze your operation and open you up to heavy violations and fines.
- Expended management time - When IT problems become a regular occurrence or contribute to operational breakdowns, your management team must use valuable time to address the issues. If you’re constantly fighting IT fires, it is hard to be strategic. Even day-to-day management can be stressed by minor outages. Finding a partner that can manage your technology allows you to do what you do best and focus on results.
Work With an Experienced Vendor Who Knows Banking
To have a competitive advantage in the industry, a community bank must work with an IT vendor that has both a technology and banking background. You can have a glamourous technology suite, but if it isn’t secure or performing correctly, then what’s the point?
At IBT Apps, we recognize that bankers need a complete technology solution that offers secure support to their entire infrastructure, not just the core. That’s why we’ve expanded our portfolio to offer Managed and Hosted Network Services, which includes secure hosting and ongoing maintenance for your bank, with the addition of Microsoft 365 to unify and bring your team up-to-date this year. With a reliable, secure, and compliant infrastructure in place, you can focus on running your business instead of running your IT department.
Avoid lying awake at night wondering if your bank’s technology will live to see another day. Connect with us to discuss your options.