How Financial Services Executives Can Get More Value from Meetings with Tech Vendors
3 questions to shape your technology purchases for the better
When executives in an FS organization (e.g. banks, insurers, capital markets firms) start to evaluate technology vendors, they’re not buying the technology - they are buying business outcomes - solutions to real business needs. The problem is that most technology sales people talk mostly about technical specifications or functionality. This is why we weren’t surprised to hear that only 20% of executives say that meetings with tech sales people meet expectations.
These meetings are critical in helping FS executives to make the right choice for their bank or insurance company. After all, the purchase of technology (be it software or hardware) in Financial Services often requires not only capital investment, but also demands on the FS team’s time, as well as opportunity costs associated with choosing to solve one business problem over another.
Where does the gap come from? Financial Services leaders are continually learning and adapting to their industry trends and challenges - be it Data Sovereignty issues in the age of Cloud Computing, demand for Faster Payments, or ever-changing Risk and Compliance regulations. These trends are driving significant change in Financial Services, and they need to stay on top of them. However, technology sales representatives often fail to understand this. Instead, they focus only on the technical nature of their solutions, or on ways to scope implementation and later support. They don’t understand the business drivers and reasons behind why FS executives are speaking with them in the first place.
Let’s take Data Sovereignty as an example. When FS players look to move some aspect of business operations into the Cloud, they need to know not only about technical throughput or response times. They also need to understand where the servers for a solution are located and how their data is being handled and processed - and that this adheres to new global data sovereignty laws. Not being clear on these logistics can lead to significant legal and financial penalties - for example Meta who paid $270 million for a recent infringement. However, technology vendors selling cloud solutions are often not able to talk about this critical issue.
The good news is that FS executives can make conversations with technology sales reps more productive and aligned to their specific needs as a financial services organization by asking the right questions. Here are three questions that FS execs should ask technology vendors:
How much do they understand the unique needs of clients operating in the Financial Services sector?
This question helps assess the vendor’s ability to customize their offerings based on the specific requirements and challenges FS players face.
Can they describe how their solution meets the regulatory requirements of Financial Services clients?
A question like this will help you understand the vendor's past experience with financial services and how aware they are of your regulatory requirements.
What are the major trends and challenges impacting Financial Services players today?
Are they able to have at least a high-level conversation about fast-moving trends like Embedded Finance, Open Banking, the rise in Payment Fraud, and the need for Deposit Gathering?
Their answers to these questions will help FS leaders understand if a given technology vendor will be able to help them with future needs after meeting current requirements and if they are looking at other industry trends that need to be addressed soon.
The best technology purchases happen at the intersection of business needs and technology capabilities. Knowing that sales representatives tend to technical specifications going in and understanding ways to steer the conversations and open a dialogue about the underlying business requirements of FS players will support sound decision-making in the high-stakes process of FS technology purchases.