By: Bob Sterner, National Account Manager
As account holder expectations evolve, embracing digital solutions is no longer optional—it’s essential for survival and growth. Community financial institutions have reached a crossroads: They must either fully commit to digital transformation or risk being left behind.
Recent data shows mixed progress within community banks and credit unions. At the beginning of 2024, only 44% of institutions had fully transformed their end-to-end digital account opening process, while 17% anticipated needing another 1 to 3 years to complete this critical shift.
Digital onboarding is also lagging, with just 41% of financial institutions having optimized this process. These stats reveal a gap in digital readiness — one that widens each day the digital journey is postponed.
The consequences of falling behind go beyond lost efficiency and a lack of “bells and whistles.” Account holder loyalty becomes impacted. In a 2024 Harris Poll, 74% of people across generations desired more personalized banking experiences — yet only 22% felt their financial institution consistently anticipated their needs. Without the customized experiences digital transformation enables, community banks and credit unions risk losing account holders to more digitally adept competitors.
Start making progress: 5 things to do THIS WEEK
While most financial institutions understand the importance of digital upgrades and utilizing their data more profitably, a big problem can be finding the time and/or resources to look for solutions. Here are a handful of tasks you can do this week to get the digital ball rolling.
- Meet with your department heads to find out how data is currently used in areas like:
- Personalizing services
- Identifying potential risks
- Improving the account holder experience
- Marketing relevant products
- Analyzing spending patterns
- Account acquisition, onboarding and engagement
- Consumer liquidity
- Small business lending
Getting a handle on your current digital and data capabilities will help you pinpoint your needs.
- Assess your current fintech vendors and answer these questions:
- Who do you currently work with for digital services?
- Do these vendors go above and beyond, meet the status quo or leave something to be desired?
- Who else do they serve?
- How long have they been in the business/are they innovators in the industry?
This assessment will help you determine whether you should continue working with your current vendors on more projects or find other third-party experts you can trust to deliver.
- Make a list of digital upgrades or enhancements your financial institution would benefit from.
You may already have a “wish list” created, or you may need to review your current digital capabilities, account holder feedback, competitor offerings and other factors. Some potential digital enhancements include:
- Automating account acquisition
- Streamlining onboarding
- Boosting engagement
- Targeting prospects and account holders with relevant messaging and products
- Assessing the data you already have available and how to use it to its fullest
- Making it easier for small businesses to apply for a loan
- Starting a hands-off, tiered debit rewards program
- Offering automated microloans
- Identify your biggest wish/need
Rank each item on your list from “most needed” to “least needed.” Consult with other department heads to determine if they agree with your ranking or have different thoughts.
- Research fintech partners
Start looking for fintech companies to help you accomplish the top item on your list (and any of your other “wish list” items). Focus on finding the right partner for a long-lasting, win-win relationship.
If you’re not sure where to start, try:
- Asking trusted peers who they use for that product or service
- Check with industry partners
- Consult industry associations
Looking back to look forward
It can be difficult to fathom what it takes to stay competitive today, but if you look back at where your financial institution was 10 years ago, you can see how far you’ve already come. If your bank or credit union had remained the same as a decade ago, would it still be thriving? The likely answer is “no.”
For community banks and credit unions, the move to digital is a win-win. Not only does it streamline operations and reduce costs, but it also enhances the account holder experience by meeting today’s demand for convenience and speed. Transforming digitally can help you make sense of the data you have and stay competitive with tech-savvy, digital-native institutions.
Questions about digitally transforming your retail banking, consumer lending and/or business lending? Don’t let today turn into tomorrow, next month or next year. Contact the experts at Velocity Solutions today!