It’s no secret that tech giants like Amazon and Apple are driving consumer expectations for all digital interactions – including digital interactions with your financial institution. The problem is that many systems still in use at community FIs are still based on what one might call “legacy technology.” Simply stated, they were architected before Amazon was even a glimmer in Jeff Bezos’ eye. This problem is not insurmountable, but it does need to be aggressively addressed.
In this episode of The Digital Banking Podcast, host Josh DeTar welcomed Chris Sachse, CEO of Think|Stack, and Brian Murphy, Partner Strategist, Nonprofit Organizations at Amazon Web Services (AWS).
Brian talked about AWS and its initiatives for building up and supporting innovation within the community banking ecosystem. Chris went on to discuss how important he feels it is for community FIs to take advantage of such initiatives.
⚡ AWS can help you stay nimble. Today’s consumers evaluate their financial institutions based in no small part on technology. That’s why many fintechs use AWS to compete in a rapidly evolving tech landscape. “If you look at some of the big reporting dashboards, a lot of them use our analytics capabilities, but these aren’t things that we are selling directly to people or directly to these companies to consume. They’re building these services for you. They have found a niche in the market, and they’re really using AWS to help them innovate and help you take advantage of innovative tools,” said Murphy.
Added Sachse, “Who can predict what we’ve lived through? And the reality is you can’t. If you build your own infrastructure, you have to predict it because you’re building an infrastructure for five to seven years. But if you build a foundation, like one you could build on Amazon, you don’t have to predict it anymore because if your prediction is wrong, you can pivot and do something [different] tomorrow.”
⚡ It’s all about building a culture of innovation. As a community financial institution, if you don’t keep up with technology and offer what others have, consumers will leave. According to Sachse, some institutions have become smarter about the contracts they’re signing and the demands they’re making.
Murphy then explained the consequences of long, old-style contracts. “If it doesn’t fit with your culture of innovation, if it doesn’t fit with your three to five-year strategy to really improve your consumer experience with technology and your operations with better analytics and better data insights — if you’re not moving toward those goals and you’re not working with partners that will help you move toward that goal, you’re not really doing a service to yourself or to your accountholders or staff,” he said.
⚡ It’s important to choose the right partner and vendor. Although the community FI space is working on technology development, it is beholden to the partners it relies on. Both Sachse and Murphy pointed out that this is why you need to be careful and smart about the partners you choose. “If you don’t have partners that are helping you stay nimble and helping you respond to the things that are most important — a core mission to your organization — you’re going to have moments where these companies that you’re working with — these vendors, they’re just vendors. They’re just people that are making money off you,” summed up Murphy.