Insider Tips on Selling Technology to Banks: Introduction
Banks Are Different!
In my 30+ years working in financial services, I have participated in the purchase of more than $100 million of financial technology. During this time, I interacted with many different kinds of software and hardware vendors - and was often surprised at the ineptitude of most of the sales efforts.
Now I consult to technology companies (as well as banks). So, the shoe is on the other foot. I have come to appreciate that selling to banks is one of the most difficult challenges for any technology firm, no matter how large or small, from the start-up to the long-established incumbent.
In this series of articles, I (along with my colleague, David Milligan) will offer five ways in which technology companies can sell more effectively to banks. But first, an introduction to the problem.
Challenges
An overriding challenge is the completely different mindsets and perspectives of banks and technology companies. Bank staff come from a complex, risk-averse, legacy environment. Technology companies are generally much simpler and tend to be single-focused and agile. A few years ago, in an earlier blog on this topic, I included the following comparison table,, focused specifically in FinTech companies. I don’t really think much has changed since then.
In fact, from what we see in the market today, the comparisons made below apply equally to all forms of technology specialist companies, whether infrastructure, BaaS provider, application software specialist, or ecosystem player.
In addition to the differing starting points outlined above, we can add the following challenges for any technology firms trying to sell to banks or Financial Services firms:
Getting yourself included for consideration. If you’re not a “household name”, this is an uphill battle. It is much easier for a selection team to work with known players.
You are most unlikely to be able to sell to the economic buyer at a large or even mid-sized bank. You will be talking to an individual or team who will only make recommendations after following a preset process.
You will almost certainly be in a competitive bidding situation. Larger banks generally require an RFP process or similar, even if you see your product as the only one that addresses a problem.
The “vendor selection” team will have several preconceived ideas about what they need. They will "know" what kind of company they want to work with, and what they need to sell an internal business case.
The selection team may have already decided informally who they think is the likely winner. Or they may have unspoken expectations that rule you out if you don’t know about them.
This is a pretty daunting list! But with these challenges in mind, the next few articles will outline a set of specific approaches - based on our real-world experience from having been on both sides of the bank and technology provider table - that can significantly improve technology sales success.
Our next article will address what may be the most important factor of all, and the one that may take the most work: make sure you’re solving the bank’s problem rather than selling your solution.