Seeing the Future

Tech Teamwork—Duggan Roberts, vice president and IT director of Quail Creek Bank in Oklahoma City, Okla., standing, predicts that community banks will stay technologically nimble and ahead of their behemoth competitors by working on innovation projects through small teams. Left of Roberts is Carol Fehrle, the bank’s senior vice president and chief operations officer. Right are Doug Fuller, the bank’s president and CEO, and and Lacey Biffle, its assistant vice president.
Tech Teamwork—Duggan Roberts, vice president and IT director of Quail Creek Bank in Oklahoma City, Okla., standing, predicts that community banks will stay technologically nimble and ahead of their behemoth competitors by working on innovation projects through small teams. Left of Roberts is Carol Fehrle, the bank’s senior vice president and chief operations officer. Right are Doug Fuller, the bank’s president and CEO, and and Lacey Biffle, its assistant vice president.

Duggan Roberts foretells four major technology shifts

By Ellen Ryan

I’m kind of a data nerd,” says Duggan Roberts, vice president and IT director of Oklahoma City’s Quail Creek Bank.

No kidding. He’s an early adopter of everything, the guy who manages all the $580 million-asset community bank’s technologies, the one who personally led the creation of the bank’s Apple Watch app when its vendors had nixed the idea.
At Quail Creek Bank, Roberts has overseen a new suite of mobile services—called Linq—including a mobile app, Apple Pay and the Apple Watch app. Linq offers mobile deposit, bill pay and person-to-person funds transfer, plus touch ID to access accounts.

That makes Roberts a sort of human prototype of the future of community bank technology and technology specialists. The young hands-on innovator offers four predictions on what he sees as the future of community banking technology.

Community banks will likely become as much technology firms as financial firms.

“Banks in the future are going to look more like technology companies,” Roberts explains. They’ll have to either partner with tech firms or hire differently to bring the necessary skills in-house.

Deciding whether to partner with a tech-specialty company, especially a startup, will depend on a community bank’s goals. Does the bank want to do sophisticated mobile cash management? Offer microloans? Or allow fast person-to-person payments between any people served by any bank?

For example, Roberts says, customers who already have an account or relationship with their bank want to know quickly whether they qualify for a loan. Why should they come to a branch and write down all that application information, especially when the bank may already have it? Technology should be able to produce the answer to a request in minutes, not hours or days.

When a community bank partners with one or more tech firms—or perhaps buys one—it can work toward reshaping its service model and processes to what customers will increasingly will want and expect, Roberts says.

Community banks will hire more people with specialized technology skills.

Frankly, most community banks don’t have enough people with the deep technology knowledge and capabilities that they’ll need for the future, Roberts says. One reason is that more customers will demand the same services and technologies that the biggest banks and so-called FinTech nonbanks offer and will continue to offer through ongoing innovation, he says.

Community banks will have many strategic technology questions to continually answer. For instance, will your bank host its own person-to-person payments system and leverage PayPal or Venmo application programming interfaces? Plus, community banks will need more top-level people to look beyond current technology options, including deciding what’s coming, what customers want, how to proceed and whom to hire.

Sure, community banks can buy turnkey products, but those products won’t be engineered to a specific community bank’s needs for service and innovation, Roberts says. Don’t community bank IT departments always end up customizing such products? “Custom-development can sound overwhelming,” he stresses, “but it will suit your community bank much better than an off-the-shelf ‘solution’ and do better by your customers, too.”

What skills will be needed? Object-oriented programming. Scripting languages. Front-end development. And creativity to handle Photoshop and Illustrator for graphic design work, “because something can be programmed well but still needs a pretty face,” Roberts says. People with these skills will work together not just on applications but on internal data and security as well.

Community banks will partner with smaller tech firms.
Roberts says more community bankers will have specialized technology expertise, and more bankers will have both finance and technology knowledge. “Your [typical] banker will look a little different,” he says. However, community banks will always reach outside to technology specialist firms to acquire the expertise they need.

The trend is clear and well established, Roberts says: Community bank technology will only become more widespread, complex, integrally essential and in demand by customers. Outsource tech firms will inevitably play a role in how community banks manage and thrive in this chaotic and fast-paced technology environment.

Relationship banking will always be important at community banks, but, Roberts says, consider the success of Ally Bank and other in-the-cloud financial firms like it—particularly those that offer higher interest rates because they have lower operational costs with no branches. “I’ll bet they’re more powered by engineers and developers than tellers,” he says. “They facilitate deposits and loans, but I definitely see that [model] as the future of banking.”

Community banks will become more nimble and innovative.

Hiring forward-thinking IT leaders comes first. Partnering with a small tech firm to develop technologies is Roberts’ preferred way to innovate; it’s how his bank produced the Apple Watch app.

However, technology is becoming increasingly scalable as well as more powerful, Roberts points out. What if, say, five to eight community banks came together as a consortium or co-op and “formed a technology company that wrote the applications that they need?” That co-op could allow community banks to leverage their collective scale to maintain their technology innovation, Roberts says. However, he also cautions that with a co-op, if too many banks are involved, any system change would have to go through a committee process. And committees kill technology innovation and speed.

Community banks have a huge technology advantage over their behemoth competitors if they stay fast and nimble, which requires a small scale to a certain degree. In that way, they are sized to beat FinTech firms at their own innovation game. In the technology of the future, two people can sometimes be more effective than eight, and eight can be more effective than 80. With fewer banks or people, innovation happens more quickly and effectively, Duggan says.


Ellen Ryan is a freelance writer in Maryland.