There is no doubt that the importance of digital banking continues to rise. Digital technology such as the responsive design of websites, both informational and transactional, is now required and demanded by the customer. While larger financial institutions have had the perceived advantage in this space due to their pockets being significantly deeper, community institutions also need to compete in today’s digital banking landscape. But community FIs can’t afford to “swing and miss” on a technology investment.
“Community institutions are trying to reduce their costs to deliver, and digital channels can theoretically lower costs,” said Annette Braun, Profit Resources Managing Director. “But there are several critical items that should be considered as they create their strategy to implement digital.”
- Understand the clear business objectives. Community institutions must know what they hope to accomplish by entering the digital transformation. “We know of too many situations where companies have made a decision to tackle digital because ‘everyone’s doing it,’” said Tom McGill, Profit Resources Relationship Manager. “They should know why they want to do it and what business objectives it will accomplish for them.”
- Select the correct partner. Financial institutions can evaluate vendors from a few primary angles. They should ask how the solution helps them reach their objectives, how it fits in with current infrastructure and what is the long-term viability of the company. Finally, price is always a component.
- Determine capacity of in-house support. Many community institutions lack the in-house capacity to complete large digital technology projects as everyone still has their “day jobs” to do. “Don’t be afraid to seek out industry expert advice to maximize investment,” advises Braun.
- Get the shop in order. If a community institution is bogged down with inefficient processes, implementing new solutions can make what seem like minor problems into major ones. “By cleaning up current tools and processes, you are clearing a path for the new solution to be successful,” McGill said. “Outdated and manual processes, procedures and policies will have a negative effect on the customer experience, which could lead to reduced adoption rates and ultimately minimize the institution’s ROI.”
A common example of implementing digital technology today is online account opening. When implementing this solution, Braun and McGill advise:
- Clearly state your business objectives before looking at any software solution. Stated differently: Know your “why.”
- Document your existing workflow. Understand its strengths and weaknesses and which functions in the workflow you are willing to change.
- Start with the customer impact and move backward into your organization to create an end-to-end resulting process.
- Consider multiple vendors. Don’t just rely on your core vendor. While your core vendor may be the best option, don’t automatically assume that they will be.
- Be realistic. Most every digital project will lead to other digital opportunities to optimize the workflow. Be judicious with your efforts so as to not go down a rabbit hole. Remember that without the appropriate sales and marketing support, the digital project will not achieve the hoped-for benefits.
Finally, staff skill sets, training and development should be considered in deploying and supporting the digital channels. Technology alone will not support the channels as customers continue to seek out the human touch.
Profit Resources specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes, and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.