As expectations for more digital services continue to grow from members and customers, many banks and credit unions are having to take a critical look at how those new digital projects are handled. Traditional approaches to new integrations are coming up short. There are many factors that contribute to this, but the acceleration of digital over the past few years has brought gaps in the project management process into focus – sometimes in very painful ways. With projects becoming more complex and a greater number of historically paper-based processes being ditched for automation, it’s crucial for leaders to prioritize investing in project management.
Fortunately, there is a growing desire amongst banking leaders to better understand the role project management plays in hitting their growth and roadmap goals. And this renewed interest is well-timed, given that the window to rely on digital as a way to differentiate is quickly shutting. As McKinsey recently pointed out in their Annual Global Banking Report, leveraging talent and technology to increase go-to-market times is a key step in future-proofing your business model and keeping up with the pace of digital. For many community banks and credit unions, partnering with fintech vendors is the best way to make this happen.
Before kicking off any digital transformation project, however, it’s important to prioritize project management and build internal processes that help you overcome challenges and effectively communicate.
Choosing to partner with fintech vendors is the obvious approach to take for many credit unions and banks on their path to digitizing. Being able to rely on their teams of implementation experts and customer-focused developers grants access to otherwise out-of-reach digital solutions. Financial institutions are able to innovate faster and launch with more confidence by integrating with the right fintech partners.
The accelerated demand for digital-first financial services has also created new unique challenges for banks and credit unions. One such challenge we commonly help our customers navigate is the difficulty of transitioning from trusted paper-based processes, like document verification for new accounts, to automated digital processes. For compliance teams in particular, whose priority is often to keep innovation in check in favor of security and safety, being supported by experienced project managers can allay regulatory concerns.
Investing in process and internal project resources is a powerful way to future-proof your institution and an investment that always pays off. From our experience working with banks and credit unions of all sizes, we’ve seen project management improvements have the most impact solving these challenges:
1. Missed project milestones and timelines
Mismanaged timelines during complex implementations can create a lot of headaches for institutions and their end-users. When project milestones are missed and timelines extended, achieving strategic goals stops being a possibility.
Charting out a clear course of what needs to be solved goes a long way to understanding both the time it takes to complete each piece as well as the contributors required to complete the project.
2. Undefined processes leading to reactivity
When internal processes are left undefined and undocumented, vital information team leaders need to solve new complex problems isn’t able to be shared. This often leads to project ambiguity and knee-jerk reaction to problems that could veer away from the project plan.
In order to keep everyone honest and avoid missing key pieces of information, it’s important to plan your project end to end in advance, fully defining what is needed and who is responsible. When challenges arise, teams can get back on track quickly with less confusion.
3. Lack of transparency and gaps in the project’s knowledge base
Too often, complex projects have scattered documentation associated with disparate pieces of project components. Individual contributors likely know their piece well, but may not have the perspective on how and where they fit in the larger picture of the whole project.
Both of these issues can create challenges for project managers as they work to keep a timeline on track end-to-end. Having a centralized repository for sharing knowledge and documentation related to a project is an effective way to avoid these common pitfalls, and key for running smooth fintech integrations.
4. External communication lacking a “tool box” for announcing changes to customers and members
Clear communication about upcoming changes to financial services is incredibly important both internally and externally. When internal communication breaks down, progress can stall and deadlines are missed from employees who might not know why the work is being done. Externally, customers and members may miss out on features and functionality that could benefit them. It’s important to understand how your customers and members use your digital products and be well-versed on changes to user flows.
Carving out time for standing team meetings with a clear agenda goes a long way to improving internal project communication and success rate. Similarly, hosting regular “town hall” style events with your members & customers can help spread awareness about digital updates.
In an environment where every decision requires an ROI assessment, knowing which decisions are going to have the greatest impact can feel like an uphill battle. Project management improvements, however, are almost always guaranteed to pay-off with outsized benefits and returns on investment. At every stage of a project's life cycle, from initial conversations with vendors to launch, streamlining how projects are executed and communicated leads to benefits for banks and credit unions.
Managing timelines to ensure projects are being completed on time is crucial when implementing new digital financial services. These technically complex projects, which typically span anywhere from 6-12 months, can come with a litany of difficult to navigate challenges. By building an internal culture that prioritizes project management, teams are able to grow and bring new products to market faster. In fact, teams of technical talent with a high acumen for project management skills have been shown to complete projects on time 20% better than those without.
Making a 20% improvement to any one specific project would be hugely beneficial, but it’s when we look at how project management plays into embedded financial products that we see the true impact. Embedded finance unlocks new opportunities for both fintechs and financial institutions. By granting access to a fintech marketplace, as is the case with Narmi’s AppXchange, institutions can quickly integrate the latest financial products directly into the digital banking platform. And while these integrations are much less complicated than swapping out a core component of the banking stack, they’re still very technical and often have drastically shorter implementation timelines. Project management makes successfully hitting these shorter timelines and seeing returns on digital investment much more likely.
A project’s success is dependent on many different factors, but perhaps the most avoidable fail point for a project is its budget. Mismanagement of how a project is executed can result in overrunning a budget – creating the need to either ask for more budget or halt progress entirely. And yet, budget overruns are commonly pointed out as the major factor in a project’s failure.
The silver lining is that by implementing some basic project management best practices, like adopting a project management software teams can use for collaboration and transparency, they can save big. According to one survey conducted by the Project Management Institute, companies who develop project management practices save 28 times more money than those who don’t.
Project failures are difficult setbacks for the teams involved and can be tough for companies to come back from. Missed project deadlines, overrun budgets, and scope creep can all create a feeling of failure. Regardless of the failure point or who bears the most responsibility, the impact of a failed project can be felt throughout an entire organization. And if left unaddressed, internal negativity and disappointments can undercut strategic goals and even lead to employee turnover.
Having leaders who know how to handle project failures when they happen is crucial for rebuilding team morale. It’s also important for building resilient teams that can handle more complicated projects and anticipate pain points before they create roadblocks. And when seasoned leaders are supported by dedicated project managers, demoralizing factors – like having to repeat work or feeling like a team's individual needs are being overlooked – can all be avoided.
How your customers and members perceive your financial institution might not seem to relate to how projects are managed, but the two are directly linked. When credit unions and banks can implement new digital services on time and under budget, they’re able to give their community technology that builds trust in choosing them as their primary financial institution. Project management best practices enable these types of positive user experiences by creating scalable and repeatable processes that are able to support emerging technologies. The opportunity to avoid outages and down-time that heavily impacts a user’s experience with your institution is too great to ignore.
By making incremental improvements to the way you think about project management internally, the more you unlock the ability to develop better strategic plans, build more resilient & capable teams, and execute projects with more guarantees of success.