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  • Writer's pictureKeith Kemph

Let’s Stop Fooling Ourselves & Stop the FinTech Spend

Updated: Apr 11, 2022

Over the last decade, the banking and mortgage banking industry has spent over a trillion dollars on the purchase of new software technology. With financial institutions continuing to move to new API based tools and technologies, the tech spend trend will not slow any time soon.

Given this bullish tech spend, are businesses really achieving the projected ROI?

Tech spend is generally justified by a strong business case with aggressive ROI projections. These projections will range from promised efficiencies that will lower operational costs to improve customer experiences that increase sales. But is all this new technology really achieving internally sold ROI figures? In one example, the Mortgage Bankers Association reported how the average cost to originate a loan from 2008 to 2018 was approximately $6,435 per loan; only to hit record territory at $9,299 recently. Even as a recent survey indicated CEO’s across the board feel their compliance management costs have dropped significantly these last couple years.

While I may not be a CFO, after a decade of tech spend, shouldn’t the cost to produce numbers be going down? Sure, I recognize there is always a cost to compete, but the numbers do not lie - firms are not getting the full value from their existing technology. Putting that aside for a minute, what aggravates me most is the ongoing intersection of financial institutions and lenders buying more software while continuing to fail at implementations. The Project Management Institute maintains over 70% of all business and technology projects are still failing. Not to say that all implementations are ‘complete’ failures, but the vast majority are never proving to achieve targeted ROI goals. In the end, failed implementations are turning aspirational new technology goals into firms just spending a lot to be more of the same and look like their competitor, never really gaining any competitive edge.

Moving forward, what is a CFO to do? Does it really boil down to two options?

Option A: Spend but start holding business and technology teams rigidly accountable to innovate, successfully execute on implementation, adopt, and achieve the targeted ROI goals? If you choose to spend, my recommendation is to start focusing more on “Program Management” and stop focusing on only “Project Management.” This one change alone, will reduce the risk of failure rates by as much as 30% to 35%. As I explained during an interview with Dave Savage at Mortgage Coach, project management is focused only on ‘output’ – whereas program management (interview), disciplines are to ensure the ‘outcome’ (ROI) of a project is achieved.

Option B: Stop spending and start optimizing at a fraction of the cost to buy a new system and process? If a firm cannot get implementations right, it will not actually innovate during implementation, and it won’t ask for professional help to implement. Perhaps it is time to reconsider the massive spend. Instead, avoid the pain, the agony, and the cost of taking on new projects. Let’s be honest with ourselves, sometimes the better answer for your firm might be to sit tight on existing technology and get help to fully ‘optimize’ what is already in front of you. Consider the following eye-opening statistics.

  • 60 to 73% of all data in a firm is unused for analytics that can help lower costs and drive efficiencies. (Forrester)

  • A four-year study concluded that U.S. organizations waste $30 billion in unused software. (

  • Utilization rates of business software features: 20% are used often, 30% are used infrequently, 50% are hardly ever, or never used… (Standish)

  • 45% of C-level managers say that they don’t know where to start when it comes to creating digital transformation strategies. (

  • 47% of CIOS strongly believe they are providing employees the applications they want, only 24% of employees strongly agree. (CMSwire)

I will abstain from dwelling on the lack of connection between CIO’s vs staff or that a good percentage of C-Level executives might be purchasing transformation software and don’t know where to start – either way, the data suggest a need to do a better job of leveraging existing platforms, features, functionalities, configurations, and customizations to achieve the newfound success a firm desires.

Over just the last month BlackFin Group has kicked off two community bank projects where they have asked us to step in and help ‘optimize’ their existing technologies – instead of experiencing the pain and agony of defeat with a new system.

For the record, I recognize this opinion may keep some of my vendor buddies from wanting to buy me a drink at the next conference. This too shall pass. However, it is time to get real about failed implementations and how financial institutions and lenders need to underwrite their own organization to determine if they are truly going to be successful implementing new technology and achieve their ROI. Bottom line, the cost of buying into trendy buzz words combined with the lack of comprehensive methods and techniques to create a roadmap for the future and implement, will deliver no value.

While my respective consulting colleagues might thrive on selection and implementation projects that promise them extensive billing hours over long-periods of time, at BlackFin Group we are focused on changing that. At the core, our approach is a desire to get in, help the client, then get out. Moving forward, regardless if you work with BlackFin or not, be sure your professional help is dedicated serving you best based on where you are truly at as an organization – with either Option A, or B. Option A can be, and has been, the better path to doubling market-share, but only if your committed to innovating and successful implementation.

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