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Digital Tools for Small Banks and Credit Unions


Lauren Wilson - January 31, 2019 - 0 comments

Digital Tools for Small Banks and Credit Unions

Many small Banks and Credit Unions feel outpaced by the strides forward made by larger banks in the area of digital transformation. Yet, experts believe they are very well positioned to make the conversion, once they decide they want and need change.

Any transformation starts by knowing what your institution stands for now and what it wants to be in the future, and how it will meet the needs of those it serves. The purpose focused nature of smaller institutions and the close relationships they have with their members offer an advantage.

Here are three areas small Banks and Credit Unions can focus to bring digital tools to their clients and members:

Self-service

Small Banks and Credit Unions have an edge over larger institutions when it comes to customer service. Celent found that 44% of community bank and credit union customers are highly likely to recommend the institutions they use to others; while for larger banks, that number is only 27%. This may tempt smaller institutions to put their service focus into the in-person programs to support this perspective. But the data supports a different outlook. In a different survey by Celent, it was identified that customers under the age of 45 prefer to do all or most of their banking online. This trend increases as you look at younger demographics and applies across products. Research from Accenture, reinforces this with 66% of millennials wanting a self-directed investment portal.  Accenture goes as far as suggesting that young customers expect technology tools as “a basic requirement for any investment scenario, rather than a ‘nice-to-have.’”

Rather than think of self-service as a substitute for their in-person service, small Banks and Credit Unions can look at it as an opportunities to extend their leading customer service when and where their customers need it. For many, online and mobile banking are already representing volumes that rival their busiest branches. “These days it’s about allowing much more self-service and minimizing manual interactions where possible,” said Steve Hunt, national head of operations and administration for BMO Wealth Management.

Convenience and Communication

Data suggest that customers appreciate the convenience of the digital services offered by their banks, but don’t feel their bank communicates with them in a personalized way, especially given the amount of information banks have about them. This missed opportunity is a perfect place for Small Banks and Credit Unions to shine.

When developing digital tools, small institutions can improve by integrating their communication programs into the technology, enabling more consistent, relevant, and personalized communication. While efficiencies will be gained, it is not the goal. The purpose is not to move to mass communications personalized only through “firstname, lastname”. Rather, the goal is to provide a streamlined and consolidated interaction manager that enables employees to improve their customer relationships and understand individual preferences at a deeper level. An investment in digital tools is also an investment in customer experience.

Mobile Banking Strategy

For small Banks and Credit Unions, adopting a mobile banking strategy will help accelerate achievement of their digital transformation. Many large banks have only just started to recognize the benefits and reorganize their distribution and delivery models in this direction, offering an opportunity for smaller institutions to close the gap.

How you design your mobile banking strategy matters. Deloitte warns that viewing mobile as just another channel is dangerous. Rather, they recommend reorganizing around digital, with mobile as the centerpiece. Doing so, they argue, will enable a truly customer centric business model. Nearly half of Americans already use mobile banking and the number is growing fast. While branches continue to have value they need to be seamlessly integrated into an omnichannel experience.

 

The benefits of enhancing digital tools extends further than meeting and exceeding the expectations of clients. They also play a role in team member retention and talent acquisition. Enabling your employees to better serve your customers is a winning combination making ease of use, training and engagement from within the institution critical. How is your institution leveraging digital tools? We’d love to hear. Reach out to us at support@myvoleo.com.

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