Many lending teams are pretty comfortable in their routine, so change is sometimes frightening. In a recent article on bankinnovations.net, Alan Woodridge, a leader in banking software, writes about dealing with change in the financial industry, particularly when it comes to using new software. He explains that technology moves at such a rapid pace today that change comes more often than not. Because of this, accepting change is more important than ever. I don’t know of any business today that doesn’t have employees resisting change.
When it comes to banking and small business lending, change is another monster altogether. Change means the unknown, and in an industry where balancing books, adhering to regulations, and staying clear of risk are major issues, the unknown can have huge implications—and a lot of folks don’t want to face it.
However, in order to keep up, change is inevitable. Below, I would like to elaborate on the five steps that Woodridge recommends for implementing a software change:
- Discover Your Primary Needs: Forget the software and determine what you need. When it comes to lending to small businesses what would help you close more deals? Are you still managing small business contracts on a spreadsheet? How do you measure the profitability of your marketing efforts? If these are issues, you may need a contact management tool.
- Define Your Goals: Think of your needs and make goals to solve those needs. Some banks have a blatant need for more business lending, but their primary goal is to increase social media engagement. While social media is great and can influence successful business lending, it doesn’t directly meet your needs. If you define your goals as they relate to your top needs, it’s easier to realize what software you need.
- Determine the Best Vendor/Product: Search through the software solutions that claim to achieve your goals. Compare the pros and cons, and choose one that you think your bank could implement.
- Manage Constraints: This is the part where you should expect resistance. Take software for business lending, for example. This software calls for a dramatic change in how your lending team works. No longer in spreadsheets, cold calling contacts, and merely suggesting a loan product, each loan officer must jump into a sales approach, actively “selling” loan products and pushing more and more prospects through the loan process. Also, you will need to sell your boss on the product. These constraints will be the biggest roadblocks to overcoming “change prevention.”
- Implement Your New Product: Once you finally gain approval for the change, everyone will need to be fully onboard. Often, just like the many exercise machines left in the dusty basement, software gets left to the side, unmanaged and seldom used. This gives everyone an excuse to avoid change. Instead, if you use the full features of the product, you can truly measure its performance and truly understand its value. Once everyone understands its value, they have successfully crossed the “chasm” of change.
These five steps to overcoming change can have huge implications for your bank. Previously stagnant, the market for business lending is starting to pick up, and there are changes to be made. Although financial technology is growing at a rapid pace, there’s really no reason to be afraid of the change. New technology only means better, faster, and more profitable solutions for banks. It just comes down to making it happen.