Let’s start the new year on the right foot with insights from BAI’s latest Executive Report, which takes a look at addressing current industry challenges and getting ahead of the new ones.
Can you remember ever being more ready for one year to end and a new one to begin? A deadly pandemic, economic recession, high unemployment, sharpening social and political divisions, record bad weather, murder hornets … Do I really need to go on?
2020 has certainly been a challenging year for financial services providers. Along with what’s mentioned above, for example, COVID-19 abruptly forced many thousands of employees to work-from-home status and prompted a widescale shutdown of branch lobbies.
Since we agree we’re all on board for 2021 — especially the part about the vaccines — we’re focusing BAI’s December Executive Report on some of the things we might expect to see in the coming year.
Let’s start with trust, the foundational asset of the financial services industry. Our BAI 2021 Banking Outlook survey results show an attention-getting shift: Barely half of consumers surveyed say they most trust their primary bank or credit union to handle their financial products and services. A year ago, that number topped 80 percent.
Karl Dahlgren, BAI’s managing director for research, explores this widened trust gap, which is due at least in part to rapidly growing competition from fintechs and other nontraditional providers.
He also makes several recommendations to help strengthen trust and loyalty, including faster responses to customer issues, stronger protection of customer data, better digital-banking experiences and stronger personal connections to customers.
Holly Hughes, BAI’s marketing director, focuses on a different corner of the 2021 BAI Banking Outlook survey for her article on what different generations of customers are looking for in their banking experiences.
Not surprisingly, protection from fraud and identity theft is a top priority for all respondents, be they an aging boomer or a youthful Gen Zer just opening their first account. Other shared priorities include speedier payments and transfers. The vast majority of millennials say they’ll readily swap out their primary financial services provider to get access to a better app and other digital services.
As customers increased their digital banking this year, Harland Clarke took a look at how banks and credit unions are connecting with customers during the pandemic.
Jeff Hassemer writes that, among the 280 financial services organizations that participated in Harland Clarke’s survey, the overwhelming focus is on the acceleration of digital banking. Essentially overnight, he says, COVID-19 transformed digitalization from a medium-priority effort centered on cutting costs to a needed growth and maintenance capability as branch activity plummeted. Jeff says those heightened digital demands will almost certainly continue in 2021.
Diversity, equity and inclusion became a front-burner issue for financial services organizations in the aftermath of the Memorial Day killing of George Floyd in Minneapolis. So how do they build on that momentum in 2021?
Debbie Bianucci, BAI’s president and CEO, offers several ways to make near-term advances that are based on her conversations with a number of prominent people who live DEI issues every day. The first way is to be inclusive when thinking about DEI—rather than focus on specific groups, banks and credit unions should be building a culture that recognizes and embraces a truly diverse range of differences. She says this culture must be supported throughout the org chart, and that banks must set ambitious and measurable goals.
Our final two articles have cash as their theme. Paul Wilmore from Cardtronics writes about the results of his company’s study during their middle months of 2020 on how the COVID-19 pandemic was affecting the use of cash.
The essential finding was that, while there were news reports about people being worried about catching COVID from cash, there was no meaningful difference in the demand for and use of cash for payments. He expects cash to retain its importance in the coming year because it provides spending restraint as well as transaction privacy.
Leo Gil from Bottomline Technologies looks at cash from a small-business perspective—basically, how these limited-resource companies can better forecast and manage their cash flows.
He makes the case for banks providing their business customers with a compact system in which business owners have a full view of their cash positions, and that also offers customized insights to help these customers best use their cash. He says the stakes in helping small-business customers optimize their cash flows could hardly be higher—the future ownership of the primary customer relationship.