Banks can no longer afford to play it safe when it comes to their digital capabilities. “Safe” is now risky.
That’s why, in this episode, Tony Hejna, EVP, Consumer Bank Chief Credit Officer at KeyBank, joins the show to share the secrets behind moving fast (without breaking things) and maintaining an edge in a highly regulated and increasingly competitive landscape.
Join us as we discuss:
- The 3 rules of job satisfaction
- Why staying safe is risky
- The importance of a robust technology infrastructure
- The threat and opportunity with open banking
- Predictions for the 2022 macroeconomic environment
Safe is Risky
When it comes to digital transformation and staying ahead of the curve, Hejna knows the importance of learning to fail fast and move on.
This execution tactic is something Hejna emphasizes to his individual team members to encourage a culture of rapid iteration and was prevalent back when KeyBank acquired Laurel Road back in 2019.
Rather than "crushing the butterfly," Key took lessons learned from Laurel Road in order to digitally progress and ensure an optimal customer experience .
Robust Technology Infrastructure
Though it's easy to set technological goals, the challenge comes with legacy systems and integration points.
Robust fintech divisions take years and resources to build, and many FIs expect quick results without properly investing in the infrastructure to achieve them.
Banks and credit unions need to ensure an incremental, agile approach over time to achieve a combination of the right people, processes, and systems.
In fact, Hejna attributes synergy around technology spend as a main driver for many mid- to large-size bank and credit union mergers; two institutions together can reduce a lot of the back-office spend associated with digital transformation.
Open Banking
The term "open banking" keeps a lot of bank and credit union executives up at night as it puts the amount of pressure on them to have a fully developed technology infrastructure in place. Larger banks especially often see the sheer amount of customer data they have on file as a competitive advantage, and as a result, are wary of open banking.
In reality, many institutions emphasize relationship banking yet fail to leverage customer data in their underwriting process, which is a huge missed opportunity.
In the end, the FIs that can balance harnessing customer data and automation with a human touch will be able to deliver the most optimal customer experience.
Open banking has to be a catalyst for companies to sharpen their focus around innovation and using data to deliver on customer needs: "if the power is in the data, whoever can figure out how to process that data to give a better customer experience is going to win," says Hejna.
Predictions for 2022
Hejna believes inflation and stabilizing home prices will be main characteristics of 2022, but feels there is a strong reason to be optimistic.
Financial institutions have adapted well over time during the pandemic, and Hejna thinks an emphasis on strong infrastructure will continue: "I think there's no other way forward than for banks to partner more with FinTech companies. I don't think think it's feasible for banks to think that they can invest on their own, and I think it's going to be great for the FinTech innovation that happens outside of banking. I think it's going to be really exciting," states Hejna.
