Banks are inherently complex given the lending business model, how they generate revenue and profits, how they manage risk and compliance along with the expectations of a bank inside a heavily regulated industry.
Developing an understanding of the key personas inside the bank is key to developing a game plan for who to call on and what the agenda of each persona is in the context of getting a sale across the finish line. To develop an understanding of each group of personas we can start on the risk and compliance side of the bank, move over to the revenue generating side and finish with the c-suite in an effort to understand an overview of each of the major personas.
Risk and Compliance Personas
The agenda of a risk or compliance executive or manager is drastically different from their peers on the revenue generating side of the organization. Risk and compliance executives are focused on understanding where risk of loss exists and mitigating those risks before they cause loss.
Audit Executives
Audit executives are unique within the organization because they are in place to understand and audit various functions of the bank. Banks generally go through a process of establishing risk frameworks that have a certain set of expectations communicated to and approved by the Board. For example, banks establish guidelines on tolerance for exceptions like past due payments or other guidelines. These guidelines establish the tolerance and if the bank is practically over those guidelines, audit is in place to understand why and possibly even adjust the guidelines and tolerance levels for the bank.
Compliance Executives
Compliance comes in many forms across the bank, but these executives are generally experts in understanding the expectations of a regulatory agency. For example, the Bank Secrecy Act and money laundering are important from a compliance perspective. Not adhering to regulatory requirements comes with fines or even more harsh punishment from a regulator. Compliance executives are in place to help a bank stay in compliance with regulatory expectations.
Operations Executives
Operations executives, which would include a Chief Operating Officer, are in place to establish and maintain the most efficient operation with the least amount of risk. Operations would include many different roles, but most will involve the establishment of FTE models and the like depending on the area of the bank and help the bank operate profitably while taking the least amount of operational risk.
Executive Personas
Executive personas are important to understand and connect with because they often act as executive sponsors on enterprise projects and technology purchases. While each executive sponsor is unique as to where and when they offer executive sponsorship, their involvement is a critical element to getting a sale closed.
Executive Sponsor Personas
Executive sponsorship will vary depending on the type of project or technology purchase, but having an executive sponsor is a critical element in the sales process. Further, the C-suite is generally the negotiator and signer of the agreement so having their sponsorship early and throughout the process is critical.
Credit Administration Executives
Credit administration executives are a component of the risk side of the organization, but generally have direct responsibility for the types of credit that gets approved by the bank in a commercial lending context. Credit administration can be thought of as a line of business and an influencer in the decision making process depending on the technology, especially to the extent the technology assists in making better and more efficient credit decisions about where the bank extends its balance sheet. A loan origination system is a great example of where the credit administration persona will play a critical role in evaluating and decisioning technology product.
Revenue Side Personas
Revenue side personas are critical to understand and include in the sales process, depending on the type of technology product. Revenue side personas can be within a number of different lines of business including some of the most prominent like commercial banking and mortgage.
Market Executives
Often there is a market executive type of persona when working with the commercial lending side of the organization. These personas typically function as a sales manager being responsible for their own P&L and often influence technology purchases to the extent the revenue generating side of the bank is impacted.
Bankers and Relationship Mangers
Bankers and relationship managers are often critical in influencing technology purchases as they are on the front lines of the organization and nearly always client facing. Bankers are often responsible for multiple roles including business development, but also ultimately responsible for client relationships. Including Bankers and other types of relationship mangers and often influence technology purchases and carry significant weight in the process.
Lessons Learned: Understand the Personas
While this is a high-level overview of the types of personas inside a bank that influence technology decisions, it is important to ask the right questions on the front end of the sales process to understand who the decision makers are, who the executive sponsors are and who the influencers are.
The Enterprise Sale
Most community banks are operating from relatively slim technology budgets, much of which are consumed by the cost of the core banking and digital banking technology. While fintech's see their contract costs as fairly modest, five and six figure investments, banks see these costs as significant and treat virtually every project as an enterprise sale. Fintechs need to be prepared for the effort and level of diligence it takes to be able to sell fintech product to a bank and include the right personas in the process.
The Importance of Compliance
Often the compliance side of the bank is the last to know about the evaluation of a technology product, especially those being evaluated by the revenue generating side of the bank. It is a mistake to not involve the compliance side of the bank early otherwise the process is slowed significantly.
Actionable Advice: Where to Start
Start by asking the right questions early in the sales process to understand who to include in the sales process, how and when to communicate with those people and the process the bank follows to manage technology purchases. Having said that, it is important to note that some community banks may not have an actual process and may need guidance from the fintech.
Recommend a Process
To the extent the bank does not have a clear process for evaluating technology, it is important for the fintech to be in a position to recommend a process, validate with the bank that this will meet their requirements and follow the process. Most banks will find this useful and will significantly reduce the time spent in the overall sales process.
Understand Who Will Influence
From the perspective of the fintech and the bank, understanding who all will be involved and who needs to be involved is a key to success. Asking the right questions and validating that all stakeholders are alighted is critical. Developing a mechanism to communicate effectively, share documentation and maintain alignment will trim months from a long sales cycle.
Final Thoughts: Be Prepared
Evaluating the understanding the personas that will guide a decision takes time and diligence, but very much worth it in the context of the overall sales process. Further, taking the time to do the work of developing best-in-class documentation as part of the sales process is also a worthwhile endeavour. The effort to understand and document all the areas the bank cares about and has to compensate for from a regulatory perspective will prove valuable in the long run. Most fintech's do not take the time, but those that do stand out.
About Finov8r
Finov8r is a leading embedded advisory consultancy that supports banks, fintechs, and corporations. Bridging finance and technology, Finov8r provides tailored solutions that foster profitable growth, simplify technology complexities, and deliver 5x ROI through fintech innovations. With hands-on advisory, Finov8r works within teams to achieve long-term results, unlock new revenue streams, and modernize operations. For more information, visit finov8r.com and follow on LinkedIn.
Get In Touch
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Bank executive, fintech founder or business owner and want to get in touch regarding Finov8r advisory? Email me at allan@finov8r.com.
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