Jeffrey P. Marsico presented on the top five strategic IT mistakes made by community banks and how to avoid them at The Future of Community Banking Conference on September 10, 2015. The mistakes included: 1) hiring a technician instead of a strategic thinker, 2) ignoring disruptive non-bank technology companies, 3) not ensuring employees can use new technologies, 4) avoiding landmines in IT contracts, 5) focusing on small details instead of strategic investments. Marsico provided ideas on how banks can partner with fintech companies, compel employees to use new technologies, negotiate contracts carefully, and prioritize strategic IT investments to further business goals.

1. Performance Measurement Strategic
Management
Profit& Process
Improvement
Board& ManagementAdvisory
Services
Financial
Advisory
The Future of Community Banking Conference
Top Five IT Mistakes and How to Avoid Them
September 10, 2015
Jeffrey P. Marsico
Executive Vice President
Office - (973) 299-0300 Ext. 120
jmarsico@KafafianGroup.com
www.KafafianGroup.com
www.jeff-for-banks.blogspot.com

2. 1
 He/she is a mechanic that can fix the car. Not design the car.
 Is he/she a strategic thinker?
 Who do they surround themselves with?
 Idea: EVP of Bank Distribution.
Top 5 Strategic IT Mistakes & How to Avoid Them
Future of Community Banking
1. We Hire a Technician

3. 2
 Square Capital advances more than $1MM per day.
 Lending club originated $4.4B in loans in 2014.
 Mint has over 10 million users.
 Quicken Loans is #3 market share in PA.
 Idea: Create partnerships with FinTech companies.
Top 5 Strategic IT Mistakes & How to Avoid Them
Future of Community Banking
2. We Ignore Non-Bank Technology-Driven Disruptors

4. 3
 Jimmy the new to work like the old.
 Training and reinforcement.
 Employees don’t use customer facing technologies.
 Idea: Compel employees to use your technologies.
 Idea: Negotiate training into new technology contracts.
 Idea: Make loan application and account opening UI’s the same for platform and
customers.
Top 5 Strategic IT Mistakes & How to Avoid Them
Future of Community Banking
3. Employees Don’t/Can’t Use the Technology

5. 4
 Termination
 Conversion/de-conversion
 Training
 Interfaces
 Idea: Be specific in IT contracts and negotiate when your leverage is the greatest… i.e.
far in advance of contract renewal with enough time to shop for alternatives.
Top 5 Strategic IT Mistakes & How to Avoid Them
Future of Community Banking
4. Avoid Landmines in IT Contracts

6. 5
Top 5 Strategic IT Mistakes & How to Avoid Them
Future of Community Banking
5. Sweating the Small Stuff
Definitions:
Hacking is defined as a targeted intrusion into a data network, including skimming.
Data on the Move is defined as “when an electronic storage device, laptop or paper folders leave the office where it is normally stored. This would
include data in transport to a storage location.”
Source: Identify Theft Resource Center
Top Cyber Security Risks
 Scope of Threat – The largest problem
remains the rate at which cyber attacks
continue to evolve and diversify.
 Interconnectivity – The interconnection
of banks and others in the industry, as
well as world wide, is crucial to the
financial system’s functioning, but it’s
also an area of vulnerability when it
comes to cyber security.
 Ideas/Mitigants – Policy and
procedures, password resets, safe
surfing, personal device management,
vendor management, employee
screening.
10.2%
29.0%
7.9%
11.5%
15.1%
10.9%
12.5%
Insider Theft
Hacking
Data on the Move
Accidental Exposure
Subcontractor
Employee Negligence
Physical Theft

7. 6
 Not building a business case for tech investment.
 Prioritizing based on strategy.
 All constituencies in a room.
 Be bent for action, and be timely.
 Idea: Change the IT Steering Committee to be less tactical (or not at all) and more
strategic. Ask standard questions: What is the business case? How does this move us
toward our strategic vision? How long will it take to implement? How will we
measure success?
Top 5 Strategic IT Mistakes & How to Avoid Them
Future of Community Banking
6. Strategic Investments

8. Performance Measurement Strategic
Management
Profit& Process
Improvement
Board& ManagementAdvisory
Services
Financial
Advisory
The Future of Community Banking Conference
Top Five IT Mistakes and How to Avoid Them
September 10, 2015
Jeffrey P. Marsico
Executive Vice President
Office - (973) 299-0300 Ext. 120
jmarsico@KafafianGroup.com
www.KafafianGroup.com
www.jeff-for-banks.blogspot.com