The digital revolution offers incredible opportunities for credit unions, community banks, and retail banks to deliver better customer experiences, increase engagement, and build lasting relationships. The widespread availability of digital banking features, personalized support, and self-service tools has completely changed how people do business with their banks.
Digital transformation is by no means a new concept in the banking industry, but many financial institutions are still struggling to adapt to this trend. While multinational banks, financial technology (FinTech) providers, and leading technology companies outside the industry have all been able to fully embrace the latest technology — and, in some cases, have actually helped cause this wave of digital disruption — smaller community banks and credit unions are still playing catch-up.
If you are in a similar position, then you have likely felt the immense pressure to evolve, incorporate digital platforms, and find new ways to deliver end-to-end banking experiences that meet customer needs and expectations. The good news is that’s a perfectly achievable goal. Use this guide to help position your institution for success in a digital-focused market.
Keep up with shifting customer demands
Customers continue to demand more from their financial institutions as the industry becomes more digitally oriented. The days of your customers handling the vast majority of their transactions in person are long gone. Banking customers today have a wealth of digital channels at their disposal, and, by and large, they want to take advantage of each one.
A 2018 Oracle survey highlighted the growing demand for digital banking capabilities:
- 86% of bank customers wanted to make payments and transfers through digital channels.
- 68% wanted to take out a personal loan using digital interfaces.
- 62% wanted to apply for and secure a mortgage online.
- 60% wanted to open up an account over the internet.
The lingering impact of the COVID-19 pandemic has only further pushed customers toward digital channels: As of September 2020, 58% of U.S. bank customers reported visiting local branches less, while 44% stated they rely on mobile apps more often for routine banking.
Your bank needs to adapt to these evolving consumer preferences and meet customers on their own terms when it comes to delivering digital experiences.
Figure out what customers want
No two customers are alike. Some are credit union members who value the personal touch. Some Millennials have never stepped foot in an actual bank. You need to deliver precisely the type, level, and quality of services that different types of customers expect, if you want to keep your retention figures up and grow your business.
Consumers have repeatedly shown they are not afraid to go to another bank if their current institution fails to deliver a great experience. In fact, a Market Force Information survey revealed that 39% of consumers would leave their current bank if they were unhappy with the quality of service.
If you want to provide better digital services and experiences to your customers, you first need to understand who your customers are and what they want. That, in turn, requires indepth analysis of data related to customer satisfaction, behavior, and sentiment, which your bank can use to refine the digital experience and keep customers happy and feeling valued.
Those in-depth insights can also fuel product development and innovation, helping you craft new services and offerings that meet customer needs.
Put the customer experience first
There are so many different ways to approach digital transformation and expansion, it can be difficult to know where to begin. Prioritize experiential improvements to deliver better support and services to your customers first and foremost.
According to The Financial Brand, only 37% of retail banks have a dedicated customer experience strategy. Even that figure is skewed by national and regional banks: 27% of credit unions and 16% of community banks follow a formalized customer experience program.
If you already have a customer experience strategy, you may want to revisit it and check that it’s aligned with your customers’ needs. In some cases, customer experience strategies focus on business benefits like lowering costs and increasing sales.
Instead, make sure your customer experience strategy prioritizes benefits that will directly impact your customers — for instance, simplifying processes, improving responsiveness, and making it easier for customers to manage their banking needs across different channels. Reinvesting in and reinforcing the importance of the customer experience will put your bank on the path to deliver real value to existing and potential customers.
