Why is Digital Success Crucial for Financial Institutions?

In today’s world, digital success is more important for the prosperity of financial institutions than ever before. This is largely due to the COVID-19 fueled acceleration of digital banking adoption. In fact, J.D. Power has estimated that only 46% of consumers will go back to banking as usual after the […]

In today’s world, digital success is more important for the prosperity of financial institutions than ever before. This is largely due to the COVID-19 fueled acceleration of digital banking adoption. In fact, J.D. Power has estimated that only 46% of consumers will go back to banking as usual after the pandemic ends, indicating that over half of clients will not revert to their old ways of banking. 

To further explore why financial institutions need to consider digital success as part of their business continuity plans—and why the time to do so is now—PaymentsJournal Editor in Chief Ryan McEndarfer spoke with David Potterton, Director of Strategic Initiatives at Alkami Technology. 

COVID has accelerated the shift away from branch banking

COVID-19 is “accelerating a trend that we’ve been talking about in financial services for a long time, and that’s around branch banking” explained Potterton. For years, financial services organizations have asked themselves questions about how many branches are really needed and whether digital-only is viable for the future.

While some consumers were early adopters of digital banking technology, others remained content visiting branches in person to conduct banking activities. The pandemic changed that, shuttering the doors of branches across the nation and forcing even those resistant to digital banking adoption to move online.

Now, those who previously thought they needed to physically go to a branch “are finding that the [digital] solutions have matured to the point where they really don’t, and they are getting comfortable with that,” he added.

FIs should embed digital success into their overall business plans

Whatever space a financial institution is in, and whatever metrics are used to track growth, digital success should be part of their overall continuity plan. But currently, digital ambitions are often seen as separate from an organization’s overall business plan. “Digital is a way to facilitate parts of that [business] plan, but it’s the plan itself that’s going to drive institutional success,” noted Potterton.  

Data is a crucial component of this plan. Organizations can leverage data to measure the success of their strategic plan and gather actionable insights into what can be improved. This could look like making intelligent decisions about which consumers to market to, when to market to them, and how to best meet their needs. 

Customer service: A key component of digital success

Today, there is a breadth of technology used to offer an improved customer experience. Video calls make it possible for consumers to interact with banking agents face-to-face via mobile devices. Agents can screen share with customers to walk them through an online banking process.

Artificial intelligence (AI), such as chatbots, can answer customers’ questions without the need for a human agent at all. With chatbots handling simpler inquiries and general questions, call center agents can spend more time helping customers with issues that are more specific, time-sensitive, or complex, making the resolution process quicker and more satisfying. 

Further, AI is increasingly capable of providing customized experiences to consumers based on factors like their previous banking activity and shopping habits. Personalization is critical to the customer experience, and can range from the basic color scheme of a website to customized offers and quotes that foster financial wellness. Ultimately, “digital is going to really facilitate that [personalization] to a much larger degree” moving forward, concluded Potterton.

The takeaway

Consumers have been shifting toward digital banking options for several years, but the COVID-19 pandemic served as an unexpected and aggressive catalyst in accelerating digital adoption. While digital growth is often viewed by financial institutions as a separate component from their main business continuity and success plan, this shouldn’t be the case.

Digital banking technology allows banks to leverage data for actionable insights and better serve their customers. From personalized marketing and product offerings to seamless chatbot experiences, digital success efforts are key for banks to thrive in today’s world.

Summary

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