February 2011: Time to Get with the Program

There are two types of technology vendors currently operating in the financial services industry: those that have come to the realization that their primary raison d’etre is service and not technology. And there are those that have not.

This argument might sound a bit counterintuitive, but upon closer scrutiny, its logic is difficult to unpick. And here’s why: Technology in the financial services industry has, by and large, become commoditized, to the extent that it no longer guarantees vendors a competitive advantage. Sure, it’s required to enter the game, but it won’t, by itself, win you customers.

Closely coupled with this notion is the growing realization that end-users’ consumer habits have changed over the last decade. Firms are now driven by factors other than purely functional ones when it comes to arriving at their purchasing decisions. Clearly, price is one factor, but it’s not the most important—not by a long shot. The single most important factor driving “buy” decisions is the level of service offered by the vendor. But, it seems, not everyone gets this.

When you factor in the incestuous nature of the various constituents that collectively constitute the financial services industry, only then do you get an inkling of how influential the information is that is passed between market participants, based primarily on the levels of service they have experienced through their vendor relationships.

In short, people talk, and, as a technology vendor, you do not want them talking about your poor levels of service, regardless of how good your underlying technology might be. Conversely, if you’re able to develop a reputation for delivering on your promises—especially when it comes to implementations—being amenable, approachable and generally easy to live with, you can probably lay off your entire marketing department secure in the knowledge that your happy clients will do a more-than-acceptable job of managing your marketing functions for you.

And yet there are still an appreciable number of Luddite-esque technology vendors that assume their products alone will guarantee their future. It did in the past, right? Yes, that may be, but the 2011 operating environment is so far removed from that of four years ago, that comparisons between the two are pointless. Most technology vendors acknowledge this fact, but for those that haven’t, maybe they will finally board the service train this year.