By : Russ Tarver
December 20, 2018 08:30 AM
Community financial institutions hoping to succeed in retail banking today must have the flexibility to serve customer needs and compete with new, innovative providers.
The financial services industry is constantly growing in scope and diversity. Community financial institutions (CFIs) and established banks are facing increasing competition from new, tech-driven providers, while customers want access to the latest digital banking tools and technologies, but not at the expense of traditional channels such as the branch.
CFIs need many attributes to succeed in this environment, but one of the most important of all is flexibility.
Customer and competitor pressures
Customers are putting more and more pressure and expectation on all financial services providers, from the largest banks to locally focused CFIs to the newest brands on the fintech scene.
Mobile-first consumers, a rapidly expanding segment, expect to be able to complete most – if not all – of their regular transactions and banking tasks via smartphone. They also expect to do this at maximum efficiency with minimal friction. The once complicated and involved processes such as account opening and loan applications, are now a core offerings within the mobile banking experience.
However, the demand for physical branches still very much exists, particularly from older demographics who are generally slower to adopt those digital platforms and prefer to conduct their financial affairs in-person.
PwC highlighted the current complexity in the industry in its 2018 Digital Banking Consumer Survey, which urged banks to "think mobile-first, or else." However, it also revealed that 65 percent of people feel it's important to have access to a local branch, and 25 percent wouldn't open an account with a bank that doesn't have at least one branch.
Despite the ongoing preference for banks with a physical presence, recent years have brought a wave of competition from digital-only providers. Ally and Chime are among the brands driving this trend in the United States, while credit card providers such as Capital One now offer both digital-only banking as well as friction-free branches in select cities across the U.S.
Facing competition from all sides, as well as an increasingly diverse and demanding customer base, CFIs can increase their chances of success by focusing on how digital technologies can enable flexibility.
The focus for CFIs in today's retail banking industry should be on delivering digital banking solutions that are flexible enough to meet the needs of individual users within their customer base, whether they are tech-savvy millennials or older consumers who are not yet fully onboard with digital technologies.
No two individuals are exactly the same – even within a defined demographic – so digital platforms should be designed to meet the needs of the many, whenever, wherever, and however they choose to bank.
Within the digital channel, consumers are increasingly looking for a frictionless experience. They want the ability to complete as many tasks and conduct as many transactions as possible, with maximum speed, convenience, and security.
The same principle applies in the branch, where members of CFIs want personalized, efficient service and minimal waiting times. New digital solutions to reduce queues and improve customer service are helping financial institutions achieve these goals.
Again, the key concept is flexibility, so providers are able to meet a diverse range of needs and consequently deliver the best possible customer experience.
With established branches and strong member relationships, CFIs are ideally positioned to meet modern customer expectations for both physical and digital banking.
By investing in powerful solutions and maintaining their focus on efficient flexibility, these businesses can continue to succeed against all sorts of competitors.