Impact of Technology on Banking and Finance Sector

By: Harsh Tiwari, Chief Data Officer, CUNA Mutual Group

Harsh Tiwari, Chief Data Officer, CUNA Mutual Group

Traditional boundaries of Banking activity and Technology have been destroyed. Today technology is an integral part of what Banks and other financial services sell. And for those who do not, it will become a debilitating weakness! Loan, Credit card, Insurance is less of a product than mobile access to enable self-driven transactions. ATMs replaced cashiers, mobile replaces entire branches.

However, consumers still prize the local footprint. Reimagining branches as a financial center/hub where community of like-minded folks can exchange/enhance ideas and educate each other is one of such changes.

“Intervening and partnering in defining the problem in the right way ensures that right solution and right interaction develop”

Financial Security is a top of mind challenge and trust in financial institutions and intermediaries is at its lowest ebb. Technology and transparency can be a key enabler in rebuilding the trust and gain advantages to institutions that get it right. Self-serve transactions, clear promises, reinforced during routine transactions, offers made at right time for right product, no negative surprises can be key capabilities that re-build that lost trust.

Culture, Pace of Change and Innovation:

Traditionally Financial Services have enjoyed strong margins, leading to an entrenched, “traditional” culture resistant to change. As a result, several research articles have found financial services, generally, lagging the benefits attainment, even as investments are made. Part of this is notoriously complicated “core IT systems” but equal part is the culture.

However, the market and consumerization of technology has re-casted the competition beyond just other FS institutions. “If Amazon can give me choice, why cannot I get the same choice on my financial needs/products?” Consumers tend to benchmark among the best!

Innovation and pace of change has picked up. Cost of processing and storing data, developing applications etc. have followed Moore’s law and declined significantly. Initiatives that were cutting edge even a few years ago are relegated to bottom of the pile. The pace is unsettling to very traditional culture! Focusing on continuous improvement instead of once and done should be a specific part of desired culture for future success.

Combined these trends make it imperative for Banks and FIs to start thinking about relevance in a new more connected, digitized world where tweeted experiences may be far more impactful (positive or negative) than all the direct mail solicitations put together!


1-Experimentation and Structured risk

Instead of going all out and trying to turn on a dime, develop a structured approach and focus energy on a few “hypotheses” that allow people to try new things or new ways. These pilots are basis of demonstrating value and guiding the institution through the change curve. Pace the investment and change based on organizational readiness, with a sense of urgency. Remember, this is about balancing reacting to market and creating internal buy-ins.

2-Technology and Business

Redraw the traditional boundaries! All projects are business projects and need technology as a component to solve. Lead in with options to solve problems and develop relationships that allow even “defining the problem”. Often, the problem gets defined based on a solution that the person(s) have thought of. Intervening and partnering in defining the problem in the right way ensures that right solution (for the problem) and right interaction (for all future problems).


Nothing fails or succeeds if you don’t define success criteria. Each project should articulate business value, methods of validating the value and tied into the corporate strategy. Then continuously measuring and celebrating the successes builds the confidence for others in the organization to emulate the behavior. Equally importantly, especially, to reinforce culture of learning and risk-taking, measuring failures or not as sting successes-gives a great way to reinforce that it is OK to make mistakes and that not every call will be perfect! While true, most cultures make this to be a key reason that employees stop thinking about innovating, let alone actually innovating!

4-Democratize Information and Innovation:

Your entire workforce is capable of thinking about how to get their work done better and faster. Leveraging their expertise and igniting the zeal in them to continuously improve their own domain begins the reinforcing cycle of virtuosity. Manufacturing long ago hit and surpassed 6 sigma quality standards. Quality circles, Zero Defect, Kaizen, etc., are all concepts ripe to be deployed in the financial services to provide unsurpassed service to take care of customers and their financial needs. None of this works if employees don’t know their performance relative to peers, benchmarks to best in class, reasons/diagnostic of where inefficiencies may lie. Helping ALL employees be innovative and continuously get better is a key enabler for enterprise success and enabled by data and technology working together with product and functional leaders.

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