Beyond the pandemic and the economic tsunami it has caused, there are some parts of the financial industry that will never go back to the way things were.
And the one that sticks out the most is how traditional banking will be redefined in coming years.
A digital transition was certainly underway. But for most financial institutions (FIs), that simply meant they transformed their self-service model from ATMs to a more digital platform. It was still about allowing customers to do some of the work themselves in exchange for more flexibility on when they could bank.
It automated processes so customers didn’t necessarily have to do all their banking during bank hours. But these platforms weren’t really delivering up to their potential until fintechs came along and challenged community FIs to up their digital game.
Then the lockdowns hit. That has meant all community banks and credit unions shut down branches and almost all banking has to be done off their digital platforms.
The new branch protocols – and outright branch closures – have added enough friction to traditional banking that more customers will judge their banks on how well they can stay digital instead of going ‘back’ to the old model.
And that’s both a challenge and an opportunity for community banks and credit unions.
Community FIs Need to Up Their Game
This massive shift to digital banking has made traditional-minded community banks and credit unions rethink their plans if they’re to stay competitive against big banks or more nimble fintechs.
Up to now, fintech and digital banking platforms have not seen the conversion in the US that is occurring in many other countries.
An eMarketer study shows fintech adoption among most major countries through March 2019. The US was 24th on the list at 46%. The top 4 on the list were China, India, Russia and South Africa, all with fintech adoption rates from 82% to 87%. But this was pre-lockdown.
US customers are likely rising fast on that list and community FIs better be prepared for the next wave in digital banking.
The following 3 categories are where community banks and credit unions need to look first when developing strategies and employing tactics within their digital banking platforms.
Your site needs to be more than a virtual product brochure. It needs to speak to common needs and problems of your customers. And it needs to talk to them as customers, not bankers.
Community FIs’ greatest asset is the fact that they are part of the local community and likely have been for many years. Use this to your advantage. You can create a welcoming feeling online simply by creating the same welcoming experience customers would receive in a branch.
And don’t lean on your digital experience entirely. Your employees have a lot of knowledge that they use to help customers solve financial problems and fill needs. Make sure customers can call or email a person if they have question, especially if it’s about a loan or other product you offer.
Guide the Journeys
Financial products are the end of most consumer journeys.
What information can you offer to become more relevant earlier in the journey?
Calculators (rate calculators for mortgages, car loans, retirement savings, etc) are nice, but they’re not enough. You need to surround those calculators with information to help the customer use the calculator to make decisions with confidence.
And that includes tips for finding a home inspection service; a guide for first-time home buyers; comparing the advantages of leasing vs buying a car; deciding on a variable or fixed rate loan; or tips on selling a house.
All this helps build your credibility in the eyes of a potential customer and makes your site more valuable than just a place to plug in numbers.
Create an online experience where people want to stay and learn.
Help the Data Help You Close
Don’t rely on your branch and call centers to close the sale.
Make sure all content creates a customer journey down the decision path to apply on your website for the right product or service with you. And that means your website has to offer them the ability to apply for the product or service.
If they have gotten to the point where they want to take the next step, don’t stop them. Make sure you get them in touch with a representative that can take them across the goal line if your digital platform can’t.
Your digital platform will have plenty of data so make sure to use it. For example, you can measure engagement as well as conversions to see where customers may be running into problems.
If you’re going to commit to going digital, it also means that you have take advantage of the internal tools, so you can build a better digital experience that will drive more sales.