The big picture: What community financial institutions should look out for

By : Russ Tarver

October 16, 2018 12:00 PM

Summary: What must smaller banks do to ensure they are able to understand the wider challenges of today's banking industry?


Today's banking landscape is a multi-faceted, multi-channel environment, where new trends and technologies are always changing how banks must plan their strategy.


In particular, the move towards digital and self-service banking has been one of the biggest changes in decades, with financial institutions having to move quickly in order to keep up with these changes and ensure they’re always providing the high level of service today's tech-savvy customers expect. 


To succeed, banks will, therefore, need to have a strong understanding of the wider industry, identify changing consumer desires and put in place clear plans to adapt their operations to meet these demands. However, this is typically easier said than done, especially for less-sizeable institutions.


The main challenges for smaller FIs


For smaller banks, one of the biggest challenges they have in navigating this world is a lack of resources. The national players can spend upwards of billions of dollars a year updating their digital platforms, creating and refining mobile apps, and adapting their solutions to align with customer feedback and emerging trends.


Community financial institutions (CFIs), on the other hand, simply cannot afford to do this. Budget and resources aside, it may also be nearly impossible for CFIs to hire and retain the right people to build and maintain a competitive digital banking platform.


With these limited resources in mind, it comes as no surprise that community banks and credit unions tend to focus on delivering a consistent service, making sure everything is running smoothly and efficiently.


But while this approach is understandable, it often results in leaders from those institutions focusing their efforts in the business rather than on the business. This makes it difficult to step back from their day-to-day operations to gain a wider view of the industry and take time to listen to what customers are saying and looking for.


Knowing what's around the corner


As a result of this "in the business" approach, it's easy for CFIs to fall into the trap of being reactive to emerging trends and technologies, rather than being proactive and delivering the latest services to their members. Unfortunately, being forced to prioritize means development or implementation of new services can take a back seat.


In order to close the gap with larger financial institutions in terms of budget, resources and awareness, it's important for community institutions to leverage the resources they do have - their relationship with their customers. Gaining insight into key trends based on customer experiences and interests can be greatly beneficial, from the standpoint of understanding customer needs in both a physical and digital banking ecosystem.


The information community banks and credit unions collect on their customers can tell them a great deal about the changing face of the industry. From consumer habits to app usage data, understanding the customer and knowing how to apply those actionable insights can help CFIs better compete in today's highly competitive market.


However, if CFIs do not know what data to search for or how to leverage it to their advantage, they can instead find themselves in a rather stagnant position. 


One way to gather and action truly insightful data is to have the right provider in place. The right FinTech provider, one with a breadth of knowledge in consumer insights, can be instrumental in not only developing a scalable approach, but also building, implementing and managing a robust digital ecosystem.


Being mindful of customer needs and leveraging consumer data can be of great help in closing the gap with major national names, while also providing CFIs with access to the tools and resources to continue doing what they do best – providing personalized services with a focus on community.


To see what the smartest digital banking solutions do differently – plus what one community credit union was accomplished with their digital banking technology – download the latest ebook from NCR.

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Russ Tarver

Senior Marketing Manager

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Russ Tarver is a Senior Marketing Manager of NCR’s Digital Insight™ solutions. For over seven years, he’s developed marketing strategies and thought-leadership for NCR’s digital and omni-channel banking solutions. In addition to his time at NCR, Russ has held management roles with financial institutions and technology service providers, leading various marketing programs and operations.