Community banks have a reputation for providing great service with a personal touch. But traditionally, they have struggled to compete with large commercial banks because they lack the resources that several brick-and-mortar branches and a massive advertising budget can offer.
Fortunately, the rise of digital channels is changing the banking landscape and opening up opportunities for smaller financial institutions. Yet, to achieve long-lasting success, these banks require the right insights and superior tools.
Today’s fastest-growing community banks are in need of a secret weapon to power their digital transformation — a technology partner that can help them on-board customers quickly and efficiently, as well as provide consultative services with an outcome-driven approach. With the right tools at their fingertips, community banks can increase deposits, build long-term customer relationships, and expand their reach without geographic limitations.
Community banks have always excelled at face-to-face customer service, and they know that high levels of service can drive real economic results. But in the past decade, digital CX has become just as important as in-person service. To ensure that digital-only customers receive the same quality treatment, many community banks need to level-up in terms of technology.
Establishing a positive user experience ties into maximizing the lifetime value (LTV) of digital customers, or in other words, ensuring that customers maintain a lengthy, valuable relationship with the bank. In fact, a 2019 McKinsey study found that customers who are “highly satisfied” with their banking experience are two and a half times more likely to open new accounts or consume new financial products with their existing banks than those who are just “satisfied”.
Nowhere is CX more important than in digital account opening — typically a customer’s first interaction with a bank. When opening an account online, today’s consumers are looking for quick accessibility, convenient onboarding, and superior user experience. With the support of MANTL’s easy-to-use online account-opening software, community banks can grow their funds and build long-term customer relationships even faster and more cost-effectively.
According to the 2019 CSBS (Conference of State Banker Supervisors) survey, core deposit growth is the most-cited challenge facing community banks. Unlike larger financial institutions, community banks often face limitations when it comes to growing and maintaining core deposits — such as capital constraints and depopulation in their geographic area.
This is why digital branches can be an ideal investment. They cost a fraction of what physical branches cost, but their deposit generation typically far exceeds an individual branch. For instance, a high-performing branch may generate 75-100 accounts per month, while a digital branch can consistently generate hundreds of accounts per month.
As an example, Midwest BankCentre in Missouri launched a modern digital branch — Rising Bank — to rapidly increase its deposit base and support its continued growth. According to a Celent analysis, Midwest BankCentre was positioned to raise $50 million in deposits in three years, but with a digital branch supported by MANTL’s account opening software, it gathered $100 million in just six months.
Unlike physical branches, digital branches largely operate at a fixed cost — even as their client base grows. With digital banking, community banks can scale using limited marketing spend to reach new customers regionally and even nationally. Banks can begin by launching in one state, expand to adjacent states, and go national with no additional fixed cost increases.
As community banks scale, it’s important for them to maintain efficiency and keep costs low. By automating the review process, MANTL’s account opening software makes opening a checking account quicker and easier for customers and more cost-effective for the bank. Automation also improves accuracy and reduces incidences of human error, which cuts down on the time and resources that are spent on manual review. In turn, this allows community banks to on-board more customers at a fraction of the cost.
Having high-quality digital solutions also adds strong capabilities to community banks. By rapidly growing deposits through digital channels, community banks can offer a greater range of products and services. For instance, MANTL’s easy-to-use account opening system helped Cross River Bank in New Jersey generate liquidity to provide loans to small businesses through the Paycheck Protection Program. With the support of MANTL’s software, the bank hit its initial goal of raising $250 million in just 15 days.
More people every year interact with online banking products and services than visit brick-and-mortar branches. Today, digital performance and UX reflect on a banks’ brand, and they can directly impact conversion rates.
Whether your goal is to launch into adjacent markets or respond proactively to a global pandemic, MANTL’s platform can strategically enhance your bank’s other services and initiatives. By choosing the top tools and the right digital transformation partners, your bank can bypass traditional limits to growth and compete on a national scale.