Independent Banker - May 2019 - 47

Resource Management, an independent advisory firm for
financial institutions. He says many community banks
struggle with their IT decisions because they are " pursuing
technology upgrades without an underlying strategic
roadmap, making tactical decisions often based on a
limited set of options and ... upgrading to technology that
is newer than what the bank had, but is still too dated to
provide a competitive advantage. "
" Many banks will say they have a strategy, " Carter says,
" but what they really have is a tactical guidepost with a
limited horizon or focus. " For example, he points out that a
bank may upgrade its online and mobile banking products
based on a strategy with parameters limited to online and
mobile channels. " Instead, they should have a strategy that
is built on the idea of digital transformation, " he adds.
Peter Cherpack, executive vice president and partner
at Ardmore Banking Advisors, says larger and more
acquisitive community banks are willing and able to invest
much more in their IT strategy with an eye toward growth
and cost savings, as opposed to basic upgrades. " Smaller
community banks may barely be profitable and cutting
Bigger banks, bigger budgets
Larger community banks with commensurately
bigger IT budgets can afford to be more
aggressive in their IT implementation, but that
should not imply that the planning and decisionmaking
process is any easier.
Chris Nichols, chief strategy officer for
CenterState Bank in Davenport, Fla., says as the
community bank's IT budget has increased, it is
spending more on its back office, cybersecurity
and network stability.
" We live in a world where banks have to spend
more on technology, " he says, adding that as
CenterState Bank expands,
it increasingly needs to
consider IT for efficiency,
client onboarding, emerging
payments, digital loan
processing and online
account opening. " While
these all will lower our costs
in the long run ... initially,
they all come at a cost
upfront. " And all of those
expenses come out of the
same pot of IT money.
CenterState Bank has
an innovation committee
and a strategic realization
department to prioritize
projects and take suggestions from bank staff in
any department or line of business. As with all
institutions, Nichols points out that there are key
compliance or upgrade initiatives that must get
done, but beyond that, a bank's chief strategy
officer and their team have the opportunity to
review any key projects thrown on the table and
decide how to allocate their scarce resources.
First and foremost, the team and bank
" Banks have
to spend
more on
technology. "
-Chris Nichols,
CenterState
Bank
leadership must weigh the business opportunity
of any potential technology implementation: the
potential risk, return, investment and how many
customers or employees would utilize it. Nichols
says CenterState Bank typically uses a scorecard
to boil down the pluses and minuses of each
option, especially if it will touch multiple areas
of the business, but ultimately " much of that
subjective alchemy boils down to vision. " " A lot of
projects are difficult to prioritize, " he adds.
independentbanker.org Q 47
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Independent Banker - May 2019

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