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Due to innovations in banking (Banking as a Service) and digital technology, customers are not ready to stand in queues for banking services or wait for months before a credit officer or relationship manager decides whether they will be granted an audience. If you cannot serve your customer in the next 5 minutes, you have lost the customer.
There are three specific areas where we can cost effectively deliver immediate and pervasive competitiveness:
Loan Origination and Servicing: Stop Losing Ground in your Communities
Credit markets have experienced significant disruption consequent to the rise of online intermediaries and financial technology (fintech) companies. A key feature of fintech companies is the substitution of algorithms and AI Decisioning for in-person interaction between lender and borrower. Their online presence has enabled these new companies to cut costs and acquire significant market share across lending products. In fact, these Fintech’s have taken over 25% of your market but it doesn’t have to be that way.
Marketing: Personalized Local Marketing for Your Bank and Your Bank Employees is not that Hard
Doing business in today’s highly competitive digital-first world is challenging for many smaller brick-and-mortar banks and credit unions. PwC’s Consumer Digital Banking Survey’s paint a grim picture for “branch” focused banking.
To transform your retail branch channel, it is important to redesign from the perspective of
micro-market customer segmentation in an area, instead of a point-to-point perspective on each branch. Also, retail branch channel is critical in developing sales channel strategy that incorporates retail branches and the Internet Bank
through smartphones and mobile devices.
Step One: Improve your bank User Experience (UX) and allow the customer to choose their path. In short, view your bank as an e-commerce company. Unsurprisingly, the majority of consumers now prefer to apply for loans online, the preference for online interactions has jumped considerably (about 30%) in recent years and is not slowing. While some segments still prefer human interactions for certain parts of the process, a viable digital process is now a must-have for banks and credit unions wishing to compete across all consumer segments and demographics.
Step Two: Leverage available Fintech point providers to complete 100% of the application process online and generate a nearly complete underwriting file according to your credit policy’s in the digitally.
Step Three: Diversify your marketing based on generational preference. Use the channels and user experiences (UX) preferred by each generation. Expand your offering to focus on potential e-commerce clients, software companies and healthcare. We even suggest partnering with employers to offer ~$1000 loans to help local businesses and their employees to avoid preparatory lending interest rates often found online.
Step Four: Service your clients through text, email and digital channels so that your bank and credit union can thrive operational expense headwinds created by the current labor market.
For Banks and Credit Unions hoping to serve a broad spectrum of consumers (such as most national and regional banks), the optimal solution will likely involve a strong online option complemented by a higher-touch, human-driven option for those customers who prefer traditional methods We first start with an analysis of your current legacy system. We have found that most banks are still using antiquated monolithic software, processes and procedures that were solved for over 10 years ago. Integration with banking cores can be maintained through available middleware such as Nxtsoft. Decisioning engines based on existing credit policy's can be enhanced and done in seconds versus weeks. Underwriters can review 100x the files and loan committee's can approve quickly.
User experience in banking (banking UX) is the combination of all emotions, thoughts and behavior of a client caused by the process of using a service / product or other interaction with a financial brand throughout all touch points of the entire customer journey. The banking UX is related to the digital products / services / ecosystem of the brand. User experience is a dynamic process. It means that brand reputation that has been built over the years is not a guarantee of loyalty and can be ruined in seconds by a small element, such as a mobile app issue caused by poor banking UX design.
Across all four asset classes and all phases of a loan application, the majority of consumers now prefer to be online compared to traditional methods such as in person or on the phone. this is especially true for Millennials (young adults up to the age of 34) but remains the case for all age groups other than the Silent Generation (ages 73 through 83). The same applies to servicing the customer.
Despite the shift to digital, there are still a large number of potential customers that prefer the traditional interaction with a human being (as demonstrated by the importance of realtors, auto sales personnel, and student representatives in loan referrals). Figuring out how to serve these segments can still be profitable and should not be overlooked. Many believe that digital means only coding, technology, complex innovations, and other technical stuff. But if the user can’t understand your product, get some value out of it, and feel the emotional connection with it, not a seemingly brilliant marketing strategy nor a huge advertising budget won't ever save you.
According to Independent Banker’s 2022 Community Bank CEO Outlook Survey, it’s making more loans to offset a flood of deposits, as well as finding and keeping key talent in this new era for workplaces. Leading the challenges for bankers responding to this year’s survey are increasing loans (56.1%) and increasing earnings (54%).
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