People love technology. From U-scans at the grocery store to full-service ATMs at the bank, an increasing number of people are content to skip the human interaction altogether in the interest of convenience and speed of service.
The knowledge of a technology-loving customer base has led many banks to make large investments in technology. And with options ranging from ATMs with video functions to fully self-service solutions, there is certainly a lot to choose from.
So before you add a new piece of tech to your existing systems, consider these…
5 Questions to Ask Your Business Before Making Big Technology Investments
1. Have you listened to your customers?
Technology is flashy, exciting and, to most, quite impressive. It’s easy to be blinded by the clean lines and convenience of new technology. Don’t let this be the case for your bank.
Any addition you make to your existing menu of customer options should reflect an improvement based on need. What are customers saying they would like to see or be able to do? Work with a team of employees to analyze opportunities and weaknesses, and then consider the technology needed to address them.
Technology is expensive – particularly when you first incorporate it into your business. Before investing this capital, make sure that you’re actually gaining something customers need or want.
To mitigate your financial risks, also consider whether the investment will pay off. Will people use this new technology? How do you know? If you have the capability, testing a product in house or utilizing a software beta version before fully investing in technology integration is always a wise option.
2. Will the technology support imminent changes in landscape?
Technology changes in the blink of an eye. The last thing you want to do is throw your weight behind a technology that will be obsolete in six months.
But it can be difficult to identify which technologies will stand the test of time. Even Facebook mogul Mark Zuckerberg has made missteps in this area. Zuckerberg admits to throwing all of his weight behind HTML5 and neglecting to pay attention to native applications, a move that he calls a mistake in this largely mobile world.
Assessing whether or not the technology you’re investing in can withstand changes in the landscape isn’t easy. So be sure to gather a team of advisors and technology experts to help inform a decision.
3. What impact could this technology have across your business?
Technological additions to your business should make business better by doing one or more of the following:
- Increasing the bottom line
- Simplifying processes — for both your employees and your customers
- Improving overall customer experience
Each of these advancements, however, should not come at the expense of existing structures and goals. Unless you have a totally outdated practice you’ve considered eliminating, letting current processes suffer as you redirect your focus to the new technology is a poor decision.
Sears learned this the hard way when they put their effort into enhancing their technological footprint and, in doing so, neglected their existing stores. As with all businesses, Sears has a finite amount of capital. In their eagerness to establish themselves as a technological powerhouse, Sears largely ignored improvements to, and even product stocking of, existing brick and mortar stores. This mistake was relatively major for this century old retailer, and led to the shutdown of more than 10 percent of their stores.
4. What are the potential risks of this technology?
No piece of technology is perfect. And some have the potential to be largely flawed. Such is the case with the Magical Wristband, a seemingly brilliant addition to the Disney empire.
This 2015 addition to Disney’s universe cost $1 billion to integrate into their existing system. Proponents argued that the benefits would be so substantial that it would be more than worth it. This band, containing all of the information about each customer, would enhance the magic of the already magical Disney experience. Greeters could know the names of visitors as they approached. Servers could deliver pre-selected dinner orders to the table within minutes of guests being seated.
Pretty magical stuff, however, like most things, these bands have their drawbacks. The bands themselves contain long-range radios which transmit up to 40 feet in all directions. Pair this with the fact that they’re transmitting customers’ personal information, and you have quite a problem. If this technology were to fall into the wrong hands, the ramifications could be far-reaching.
So, before you commit to technology, explore potential risks. While safety is, especially in the financial sector, most important, other issues with technology can spell disaster. Also consider the ease of use of the new technology as well as how well it will integrate with your existing systems. Because your mind should never be far from your bottom line, also consider the cost of regular updates and potentially necessary repairs.
5. Can you afford the risk?
Regardless of how carefully you analyze all of these factors, investing in new technology will always have risk. Nothing is guaranteed, after all. The final question you need to consider before taking a technological high dive is, “Can we afford that risk?”
If you’re a smaller bank with a tight budget, the answer might be no. And if your answer is no, you need to dig even further. Considering all of the ramifications and calculating your loss if the technology flops is vital.
If you’re a larger bank, you can likely be a little riskier. Disney wouldn’t have invested $1 billion in anything if they weren’t, well, Disney. If you’re lucky enough to be a relatively monolithic part of your industry, taking a risk isn’t quite as potentially costly as it would be for a smaller competitor.
A walk on the tech side may seem like a risk-free proposition. Unfortunately, such is not the case. Companies in general, and banks in particular, can and do make technological adoption mistakes. Predictions are difficult in today’s rapidly changing world and are often the basis for big technology bets. Technology must be flexible enough to adapt to changing operational objectives while accomodating future needs. And technology strategy should focus on preserving investments while maximizing revenue.