Most customers of a bank or credit union want to transact with their institution the way they want. Pretty straightforward, right? According to research from BAI, business owners say they prefer to open new accounts or apply for loans online (67% and 56% respectively). In practice, however, they often conduct these transactions in a bank branch (60% and 59% respectively).
Is all the hype about digital banking overblown? Not quite.
It’s not that business owners ache to do business the old-fashioned way or are jonesing for free bank branch coffee. It’s because the online experience is lacking. Issues such as lack of transparency, accountability, and task redundancy top the list of reasons why business owners—despite doing most of their research and preferring to transact online—pull on their boots and head over to a branch to do the deal.
Despite all the chatter about banks and credit unions “going digital,” many have failed to put in place the requisites to actually do it. In fact, I contend that financial institutions have failed to define what going digital really means.
Most have content about their product lines on their websites. Check. Some have even added calculators and financial tools to help customers discover products they may not have previously considered. Check. But the problem is that many drop the ball where it counts, which is making it easy to get things done. Or, in other words, letting the customer transact the way they want.
A digital banking strategy roadmap cannot merely be a marketing strategy. When a prospect is ready to buy, especially if the prospect is an existing customer, the experience to acquire the product should be quick, simple, transparent, and accountable. The only way to accomplish this is to ingrain this philosophy in the institution’s DNA and put in place the infrastructure to deliver. That means having the right people, the right processes, and the right technology.
Start with the first problem. In the financial services industry, the people problem is a big problem indeed. Many people who work at banks are great at banking—things like operations, lending and portfolio management—but not digital services delivery.
So banks are turning to external consultants and contingent workers to help define and implement digital strategy. This is perhaps the most popular way to solve the people problem, though some institutions are investing in full-time talent. Either way, the problem requires a serious commitment of resources.
Once you have the team in place, the next step is defining the processes and implementing the shared services that are the foundation of a digital banking strategy roadmap.
There are lots of tools and applications, and no shortage of newfangled FinTech providers creating solutions for every aspect of financial services, from chatbots to payment systems.
Before wading into the FinTech thicket, whether buying ready-made solutions or building custom ones, there are two areas of technology infrastructure that banks and credit unions must get right. They are instrumental to delivering a seamless digital experience for customers. They are low-touch document processing and automation-based systems integration.
At the heart of every financial transaction is document processing. Nothing happens without documents. Requesting documents, receiving documents, analyzing documents, extracting information from documents, routing documents, and assembling new deal documents.
Document processing keeps the cogs of the institution running. But document processing is still largely old-school and manual. It’s people driven. Unless you implement a layer of shared infrastructure that optimizes the core everyday task of document processing, you will have no chance of delivering a digital experience that’s fast and seamless.
The goal is to keep human intervention to a minimum. The core capabilities of low-touch document processing are omni-channel document capture (or document gathering), AI-infused machine learning that auto-classifies documents and extracts the necessary data, and intelligent workflow that routes documents and data when and where they are needed. These technologies have become mainstays in larger organizations. And the tools are available today for community and regional institutions.
Having all deal documents flowing through a central hub ensures documents are processed consistently, in compliance, with nothing falling through the cracks. Further, documents from prior transactions can easily be resurfaced, eliminating the need to repeatedly ask customers for the same information.
Few banks have the luxury of replacing legacy core systems with a modern, digital-ready infrastructure. Check that, none do. This means that any new infrastructure services you introduce (like intelligent document processing) must easily integrate with the rest of your systems.
Automation-based systems integration is a must have. Even if you implement the best document processing service, it’s all for naught if that information cannot get to the systems required to assess and complete a deal. This is where RPA (robotic process automation) comes into play. RPA guarantees you’ll be able to integrate any documents and data directly with the other applications in your infrastructure, be they Windows, browser or legacy-based. All of this should happen without the burden of customization or hard-coding.
Business customers are still willing to venture into a branch to conduct important transactions. Don’t expect that trend to continue much longer. Businesses are growing accustomed to better digital experiences in other aspects of the business and in their personal lives. Just think about how easy it is to do business with Amazon and other digitally savvy brands.
None of this is to say that branch banking is dead. But even as banks and credit unions overhaul their branch experiences to better serve customers by providing more personalized advisory services, they must maintain focus on the modern banking customer, who is proving to be a fickle breed susceptible to the charms of digital suitors.