Do Banking Procurement Teams Need To Be Better Connected With The Core Needs Of Frontline Banking?
Whether analyst or managing director, the feedback to DealPro is consistently, and overwhelmingly, positive. A view that “finally” there is a straightforward tool that removes the daily grind of DCM processes …. And adds value … And delivers competitive advantage. What happens next though? How can procurement teams enable new tech? What can we learn from the current, some times over-complicated, process?
- Specialisation: Procurement teams are experts in their own field, typically professionals in procurement, sourcing, and vendor management. The primary focus is to optimise the banks purchasing processes, negotiate contracts and manage vendor relationships. More often than not, they don’t need to have the intricate details of every banking product or service.
- Risk mitigation: Their focus when selecting vendors is risk mitigation and compliance – so criteria include financial stability, security, and legal compliance. Having said that, it is important for the nuanced needs and preferences of front-office banking staff to be considered.
- Cost efficiency: A primary objective is to drive cost efficiency – this needs to be aligned with the long-term financial gains by improving operational systems through digital transformation.
- Organisational structure: In most corporate banks, procurement is somewhat isolated from front-office operations, making it more difficult to communicate each other’s needs and challenges.
- Focus on standardisation: To streamline operations and reduce complexity, procurement teams often seek standardised solutions that can be implemented across the organisation. While this can lead to efficiency, it doesn’t always address the unique needs of different departments.
At Finsmart we work closely with procurement teams as we believe that in order to make this process an enabler, a two-way interaction is needed. It is an education that goes both ways and often takes some time to get processes and people aligned.
In our opinion, to bridge the gap between procurement teams and banking needs, the following should be considered:
- Cross functional teams – encourage collaboration between procurement, front-office banking staff and other relevant departments at the earliest stages of meeting a new fintech provider.
- Communication channels – establish clear feedback loops, with regular meetings, and other mechanisms to ensure new systems meet the needs of both parties.
- Education and training – provide procurement professionals with training and exposure to the operations they support. This will enhance their understanding of the industry and challenges faced by front-office staff. Equally, from analyst to director, bankers should understand the procurement process of their institution.
- Front office specialisation – appoint front-office employees within DCM that have a deeper understanding of digital transformation and technology combined with their business experience.
- Flexibility – a tacit understanding that not all banking needs can be met through standardised solutions. Allow for flexibility to accommodate specific requirements.
By implementing these strategies, banks will enjoy significant competitive advantage by accessing and onboarding the very best and latest fintech solutions, improving efficiency, and staff and customer satisfaction.