Community banks have lost their edge in delivering a relationship-based banking model to local customers and businesses. And yet, there is good news on the horizon, as they can get it back by embracing the next stage of digital customer transformation.
For a long long time community banks and credit unions have—and rightfully so—laid claim to being the “kings” of customer experience and relationships. The story went that only an organization based in the local community could really deliver a personalized, relationship-based banking experience to consumers and businesses. Yes, a big bank might have more robust products and broader solutions, but they don’t know your name when you enter a branch or apply for a business line of credit.
Well, times have changed. Using advanced digital technology, large financial companies and some non-traditional financial players have started to erode this advantage. The big banks have gotten good (or at least better) at delivering a personal relationship. And technology has allowed them to lessen this gap. Big banks have embraced digital transformation to deliver a more personalized experience not only digitally but in traditional channels as well.
So what can community banks do to counter this trend? In a few simple words; embrace the next stage in digital transformation: digital employee engagement. Take digital to the next level and transform the organization to be customer focused and use the best technology available to attain this goal. Once the community banker can match the large bank’s digital strategy then their traditional advantage of relationship focus will once again shine: as, let’s be honest, it hasn’t really gone away. It just doesn’t sparkle as it once did. It’s time for some of the luster to return. Here is how the banks can start the journey…
1. Community financial institutions must match the offerings of the big players in terms of a digital platform: consumer, business, mobile and internet all delivered from a single infrastructure. And there are many technology alternatives in the marketplace that come both ”out of the box” ready for deployment, and as digital platform solutions more geared towards transformation—which include developer tool kits and the like for the developmentally minded bank.
You’ve got to have a single digital platform to drive all consumer and business functionality. It must share components across devices. There must be functional parity across devices and channels. And it must be a single user experience. Wow, that is so 2017! All so obvious. But many community banks still have not arrived. Well, get there: There is no excuse as plenty of third-party solutions exist to enable this first stage of transformation.
2. Community financial institutions need to transform the customer experience delivered by the employee. Yes, employees need cool digital tools. And they should be exactly the same tools customers use. One tool to rule them all. One tool to provide all functionality. One tool with great entitlements so you can turn stuff on and off depending on who’s using it. One tool used by consumers, businesses and employees.
This effort accomplishes two things; it optimizes the move towards self service and it optimizes the move towards “assisted self service.” What is assisted self service? It turns out that when you digitally transform the traditional employee’s job (given so many transactions have been pushed out to the customers already), you come up with a very different model based more on the employee assisting the customer than doing everything for them. This new model blends the best of self-service and full service—and rethinks the entire paradigm of customer interaction.
As an example, a traditional “teller system” will look very, very different once you realize which transactions they perform and how you can integrate the customer into the experience. No more sitting behind a desk hidden behind a terminal: Now you’re sitting on a couch, sharing a coffee and looking at iPads. Once completed, this second phase of digital transformation truly ratchets up the pressure on big banks. They can’t do this. Their internal systems are just too big and unruly.
Try replacing an employee’s terminal at a top-volume bank and you will get a very complex set of choice and decisions. But community banks can readily manage this effort. We can transform the experience because it relies on fewer systems and less complexity. Community banks wield a real advantage here based on the simplicity of their infrastructures. They need to drive this advantage home when it comes to digital transformation.
Community banks need to leap back ahead and let the relationship shine. Once a community bank has matched the digital offering and leap frogged by transforming the employee experience—all on a single platform—they will once again spotlight their advantage in maintaining personal relationships. The greatest lesson of digital transformation is that customers seek and benefit from bank employee interaction: Employees can and do add real value. People do not want full, 100 percent self-service and probably never will. They like people to be involved when they need
help. When they push past the big banks and seek a digital engagement model, based on assistance and interaction between customers and employees, community banks will once again be crowned the “kings” of relationship banking. This is an exciting time to be a community banker! Let the king step up to the platform.
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Robb Gaynor, general manager heads up digital banking
solutions in North America for Malauzai, a Finastra Company.