The Price of Doing Nothing: How Tech Inaction is Costing Your FI, and How to Turn it Around
In today’s fast-paced, tech-heavy financial landscape, standing still is the same as falling behind. Financial institutions that aren’t investing in data intelligence, automation and other advanced technology risk losing ground to competitors who are keeping pace with innovation.
Are others passing you by, without you even realizing it? Keep reading to discover the cost of inaction to your financial institution and how you can change course to reap the benefits of tech progress.
The price of inaction
While other financial institutions harness new technology to help fuel growth and deepen account holder relationships, sticking to outdated systems can lead to costly disadvantages, including:
- Losing Gen Z account holders. If it’s not a seamless digital experience, these tech-savvy consumers will jump ship for a better option. And when Gen Alpha starts banking, we can assume the expectations will be even higher.
- Losing relationships. Across all generations, 74% want more personalized banking experiences, but only 22% say they regularly feel like their financial institutions anticipate their needs. Young or old, your account holders may abandon their accounts and take their deposits to a financial institution that offers better incentives, custom recommendations and targeted messaging that resonates.
- Losing top-of-wallet More than one-third of consumers use a card to earn rewards. Without a digital strategy to incentivize use, account holders will move a more rewarding card to their #1 wallet choice.
Heed cautionary tales
History is littered with companies that failed to keep pace with technology and ignored innovation. These once-profitable brands are now looked back on as relics of their time. Their stories are a stark contrast to disrupters and early adopters who took action — and are still being rewarded for it. Most of us are familiar with:
- In 2008, its CEO commented, “Neither RedBox nor Netflix are even on the radar screen in terms of competition.” Ignoring the rise of kiosk rentals and streaming soon led to its demise.
- Eastman Kodak, Co. A once-dominant player in the photographic film department, Kodak wasted its chance to remain on top by significantly underestimating the impact digital photography would have.
- The arcade game pioneer stuck to its guns about gaming being an individual process (instead of a shared experience) and missed out on competing in that very lucrative industry.
- How did the coolest social network lose its status so quickly? It didn’t evolve to match or exceed Facebook’s superior design and user-friendly experience — and paid the ultimate price.
The list goes on, but the common thread is the failure to act, evolve and stay relevant. The innovation train passed these brands long ago, but it’s not too late for today’s community banks and credit unions to get on board.
Listen to account holder feedback. See what your competition and industry leaders are doing. This will help you gauge whether or not you’re on the right track.
Start taking action today
Sometimes, the hardest parts of change are acknowledging its necessity and taking the first step. Make today the day you end inaction and start getting the most out of your data and technology.
This week, identify what areas in your financial institution need upgrades or digital transformations. If your list feels long or overwhelming, that’s natural: few organizations can digitally transform using only their internal resources. That’s what partnerships with experts are for.
So, reach out to trusted industry contacts to ask for referrals. Then, start vetting. And remember: Once you take these first steps, you’ll have the momentum to see the project through to fruition. Although innovation can be uncomfortable in the moment, it ultimately leads to transformative improvements and significant results.
To use your financial institution’s valuable data to its fullest, check out the Velocity Intelligent Platform® today. Our innovative banking management technology integrates with any core and powers all our solutions. Whether you’re looking for a cohesive, engaging retail strategy or responsible consumer liquidity options, Velocity Solutions is here for your financial institution.