As a business owner who works with banks and relies heavily on technology, I read Steve Morgan's recent article in The Financial Brand, "Why Banks Should Rethink ‘Every Company is a Software Company,’" with great interest. Morgan makes an important point: Technology indeed plays a crucial role in modern banking, yet, as he suggests, banks may be focusing too much on technology at the expense of the core products and services that define them.
This trend appears likely to continue. Morgan’s article references a McKinsey Global Institute report, which states, “the financial sector’s spending on AI is projected to experience substantial growth, with an estimated increase from $35 billion in 2023 to $97 billion in 2027.” The financial services sector, Morgan observes, “has been at the forefront of the AI revolution, from automating customer service through chatbots to leveraging machine learning for fraud detection and personalized financial advice. The excitement around AI stems from its promise to revolutionize traditional financial processes, improve efficiency, and enhance customer experiences.”
AI can indeed deliver on those promises: To “revolutionize traditional financial processes, improve efficiency, and enhance customer experiences,” among others. We’re also seeing AI transform community bank marketing. For example, our integration of AI-driven content development into BankMarketingCenter.com’s suite of services has been a tremendous asset for our clients, many of whom operate lean marketing departments. This integration makes content creation quick and easy with significant enhancements to the compliance process.
Morgan raises a good question: With so many proven providers who can bring AI’s potential to banks—spanning marketing, customer experience, compliance, and data protection—why are some banks determined to “do it themselves”? Morgan notes that while banks are “at the forefront of the AI revolution, some institutions have encountered significant delays and budget overruns in their AI initiatives, while others have struggled to meet their goals.” For instance, attempts to enhance customer satisfaction with AI-driven customer service bots have, in some cases, led to customer frustration and confusion due to inadequate implementation.
Banks provide immensely valuable products and services and excel when they focus on what they do best. However, we’ve all seen how challenging tech adoption can be for banks. I’m reminded of an old ad agency saying: “Why bark yourself when your dog can do it?” As it turns out, there are plenty of reasons for banks to consider outsourcing their tech needs.
As we discussed in a recent blog post, “Why isn’t your AI implementation what you’d hoped?,” banks, as well as businesses in other sectors, often struggle with taking tech in house. Here’s why outsourcing can be beneficial:
- Cost and resource efficiencies: Developing robust AI systems requires significant investments in specialized talent, infrastructure, and ongoing research—costs that are often prohibitive for smaller community banks. By outsourcing to specialized AI providers, banks gain access to cutting-edge technology without the high costs of internal development and maintenance.
- Enhanced time-to-market: In a rapidly changing tech landscape, customer expectations and compliance requirements are constantly evolving. External vendors often offer pre-built, customizable tools that can be integrated more quickly than building a tech stack from scratch, allowing banks to keep pace with changes more effectively.
- Access to advanced expertise: AI providers have dedicated research and development teams focused solely on advancements in AI, data security, and regulatory technology. Banks partnering with these providers gain access to the latest innovations in natural language processing, predictive analytics, and compliance automation, which can significantly improve customer experiences and strengthen data security.
- Enhanced security and compliance management: External AI vendors often provide secure, compliant solutions that are regularly updated to meet regulatory standards. This reduces the burden on banks to monitor and adapt to evolving data protection laws, decreasing their risk of legal or regulatory penalties.
- Scalability and flexibility: Outsourcing allows banks to scale AI solutions up or down based on demand. AI providers typically offer flexible, cloud-based solutions that can adapt to a bank’s needs without requiring substantial in-house investment in infrastructure.
Let Your Tech Partner Do What They Do Best
As Morgan says, “by focusing on core competencies and leveraging specialized providers for technological needs, banks can optimize their operations and achieve the results they’re looking for. Partnering with technology firms allows them to tap into cutting-edge advancements without bearing the heavy burden of developing and maintaining them themselves.” I’m confident our 350 partner banks would agree: let your technology partner do what they do best so that you can focus on doing the same.
Bank Marketing Center
Here at bankmarketingcenter.com, our goal is to help you with that topical, compelling communication with customers — developed by bank marketing professionals for bank marketing professionals — that will help you build trust, relationships, and revenue.
We also want to share what we know – and learn along the way – with all our community banking friends. Whether it’s the latest on AI technology, suggestions on how to attract and retain top talent, or the importance of data protection, we’re here to make bank marketing the best that it can be.
Want to learn more about what we can do for your community bank and your marketing efforts? You can start by visiting bankmarketingcenter.com. Then, feel free to contact me directly by phone at 678-528-6688 or via email at nreynolds@bankmarketingcenter.com. As always, I welcome your thoughts.