Bank Director | Top tech trends for financial institutions to turn headwinds into tailwinds
By Ravi Nemalikanti, Chief Technology Officer, Abrigo
Financial institutions are facing existential risks – in changing demographics, the high interest rate environment, talent shortages, and disintermediation of financial services from bank providers. With headwinds like these, some financial institution leaders may be tempted to hunker down rather than accelerate transformational change within the institution.
The ones that will thrive are pursuing technology and talent to make themselves more efficient and attractive to customers.
If the Paycheck Protection Program showed financial institutions anything, it was that being able to respond quickly yields growth and opportunity, along with the chance to better serve communities, even during the deepest recession since World War II. According to FDIC researchers, community banks that invested more in technology before 2020 saw higher increases in both loan and deposit growth than those with less investment.
Three technology trends increasingly deserve attention from financial institutions, even amid economic uncertainty. These trends address institutions’ desire to efficiently attract and maintain new business despite the short-term picture, and they will likely hold the key to success in the future.
Interoperability
The first trend is the increased use of APIs (application programming interfaces) and process automation. Many financial institutions are on board with automating manual tasks and have moved to digitalize some processes, such as origination. Automating the process of collecting and making decisions on loan applications has helped many of our customers cut a significant amount of time from commercial loan requests to funding. And when the origination platform is interoperable with other automated business processes, executives and leaders gain strategic insights into real-time portfolio monitoring, board reporting, etc.
RPA (robotic process automation) and increased interoperability can also help banks and credit unions with staffing challenges. Some institutions will be running on a lean staff by strategy, while others are having trouble hiring and retaining experienced talent. In either case, financial institutions that focus on RPA and interoperability make the most of their staff’s skills and time.
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