Exploring How Can Procurement Teams Can Expedite The Onboarding Of New Technologies
In my latest blog, I explain how the procurement process can be improved to the benefit of bankers, who are calling out for the technology to help them in their day to day jobs.
How easily are new technologies adopted?
Innovation and technological modernisation, in any part of our economy, not just banking, needs market validation to gain momentum.
More specifically, market validation in debt capital markets occurs when the prime beneficiaries, in our case the bookrunners, are willing to embrace it, to make it part of their day-to-day business seeing significant value added to their existing workflow, data analysis etc.
What is procurement?
Procurement is the function within the banks that ensures this “external” new technology can be internalised in a way that is acceptable given the bank’s size of operations, geographical reach and responsibility to their clients. It is procurement that effectively initiates the market validation that fintechs in our community look to achieve.
A critical part of onboarding, why is procurement still so cumbersome?
My personal experience in a large bank, and more recently as the innovation provider at Finsmart, points to the following issues:
- Disconnect between business and operations. The syndicate or DCM desk are keen to have the new technology but are unaware how to mobilise this innovation
- Procurement as a process still has a “one size fits all” set up. It doesn’t matter whether the onboarding is for a big data vendor for example or a small fintech, it follows exactly the same steps
- Procurement functions seem to be overloaded and to a certain extent underrated for the importance of their role
Smooth integration needs attention to detail
It is understandable that onboarding a new technology needs a lot of attention in terms of system security, integration, data access, data storage. An added complexity is that procurement is not just one group of people but multiple groups with certain specialisations coming together to ensure a successful onboarding.
The onboarding process can still take from 4 months to over a year to conclude – a challenge for all involved.
How can procurement be improved to the benefit of the bankers who really need the technology?
Fintechs keep exploring ways of safely expediting this process, some suggestions follow:
- Nominate a suitable person within the syndicate/DCM/COO team to be better versed in technical/operational matters
- Procurement should expedite innovation adoption – the process needs to be aligned to the size of the vendor and purpose of the integration
- Cultural change within organisations supporting innovation and digital transformation is needed
- Procurement teams need to be involved in the early stage discussions with fintechs
The procurement function does not operate in a vacuum in a bank, it consists of a number of highly skilled professionals who are the glue between business, technology and operations. At Finsmart we continue to work with amazing people in these functions. By working together banks and fintechs have the opportunity to transform innovation to the benefit of all.
By Sotiris Manderis, Co-founder and CEO, Finsmart