Rethinking the ROI of banking tech investments

Mac Thompson is the CEO and founder of White Clay, a company that helps banks and credit unions build deeper and more profitable relationships.

Technology has become the go-to response for nearly every challenge in financial services. But relying on technology as a standalone solution will deliver underwhelming ROI. That’s because technology, on its own, doesn’t solve business problems. It brings solutions but only when paired with the right strategy, people and process. Too often, financial institutions invest in expensive tools and then adapt them to fit outdated workflows. The result is a faster, more efficient, digital version of the status quo but it is far from transformative.

The industry is stuck in a cycle of treating technology as an IT problem rather than a business initiative. That mindset creates a cascade of problems: weak ROI, low adoption, fragmented client experiences and projects that automate compliance or internal processes instead of increasing client and/or shareholder value.

Here are three suggestions for financial institutions to maximize technology ROI:

- Begin with the problem, not the product. This sequence is often backwards. A bank hears about a ‘shiny new object’, purchases it, and only later asks what it’s for. By then, the investment is locked in, and the business case is reverse engineered to justify it. This approach leads to wasted funds, poor adoption and technology that fails to solve real business problems. 

Instead, effective institutions start with the business problem. They bring in business revenue leaders (i.e. those who directly interface with clients) to identify the pain point or opportunity, define the desired outcome and map out a solution. Only then does the conversation turn to technology, if it’s even needed at all.

- The vendor selection needs a redesign. Traditional vendor selection processes focus almost entirely on risk mitigation with extensive technical checklists and security reviews. While that’s important, these conversations should also address how the technology will solve the bank’s pre-determined business problem; otherwise, there’s a risk of selecting the wrong vendor. Operational and IT teams should work alongside business leaders to evaluate vendors not just on the technical fit, but also on their ability to increase value for customers, shareholders and maximize ROI.

Business leaders are often absent from vendor selection because they’re stretched thin managing multiple projects and find these meetings less engaging. The reality is that the standard vendor selection structure isn’t the best use of their time, which makes participation feel less valuable. With a redesigned process focused on solving real business problems, their time can be used more effectively — and the upfront time investment will pay off in the long run.

- Who leads implementation matters: Even when banks pick the right technology for the right reasons, implementation often minimizes the potential return. That’s because it's typically driven by IT and project management teams, with little to no participation from the business side. However, when the people accountable for growth and client relationships lead the charge from start to finish, the result is more likely to deliver meaningful impact.

Coaching and training play a critical role in this process too, not just to support implementation, but to address the cultural shifts required for teams to better collaborate and ultimately bring more value to clients.

Technology drives true ROI when it’s seen as a cultural evolution rather than just a series of IT upgrades. Effective leadership encourages business leaders to participate from the outset, develop a strategy, define the business problem and implement outcome-focused solutions. By aligning technology with purpose, financial institutions can build systems that not only automate processes but also move the business forward and deliver real value for clients and shareholders.