Portions of the following commentary have been excerpted from the July 17, 2018 BIGcast series, entitled “Out-Partnering Your Competition,” with host John Best. Jeffery Kendall, Executive Vice President & GM of Global Banking & Financial Solutions at Temenos, and John Janclaes, CEO of Partners FCU, were both interviewed.
Banking leaders across the globe know that in order to compete in today’s market, they absolutely must engage in digital banking transformation. Laying the groundwork begins with selecting the right digital banking team – and leading their progress in a way that furthers your innovation agenda as quickly as possible.
This means challenging some long-held practices and adopting a more inclusive – yet agile – approach. For example, the old school thinking is to select one vendor only. That was very common as people picked core processing vendors, and over time those core processors built a very narrow stack of solutions. It was a natural evolution for banks and credit unions to continue going back to the same vendor, and, in the process, miss out on all the innovation happening outside of that single vendor’s four walls.
The last thing you want is to feel “vendor lock in.” This happens when you’ve made one decision with one company, and now you’re locked off from all of the innovation going on in the rest of the market.
The best digital banking partners will tell you that they have really smart people while also acknowledging that there will be a lot of innovation coming from elsewhere. This is essential when you consider the velocity in which the digital landscape in banking is changing. Literally, there are capabilities we have now, and options to deploy new functions and new features, that weren’t there 90 days ago. If you think about how rapidly the market is changing – and the device capabilities are changing – not to mention consumer attitudes that are always changing, it doesn’t make sense to lock yourself off from that.
My advice is to convene a team with both internal talent and outside experts, with the idea that one partner alone is not going to completely own this space for you. Instead, look at your lead partner as the glue or the open platform in which new capabilities from other vendors and open banking API can connect. They can act as your docking station for new capabilities and functions to plug in and play.
The last thing you want is to feel “vendor lock in.” This happens when you’ve made one decision with one company, and now you’re locked off from all of the innovation going on in the rest of the market. Create more of an ecosystem than a hierarchy.