How banks should manage digital transformation

Banks and credit unions can successfully embark on a digital transformation journey if they unify internal stakeholders around a common goal.

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Turning a traditional bank or credit union into a digitally-forward institution is not trivial. But increasing competition and higher expectations towards omni-channel customer experiences are pushing banks and credit unions to modernize quickly and efficiently.

While moving a traditional organization into the digital world may seem like turning the Titanic, here are a few helpful steps to help your organization get there.

Get executive buy-in on digital transformation

“Going digital” is not a passing fad. Offering Online Account Opening experiences to customers and automated workflows to your operations team are quickly becoming table-stakes for long- term success. Online Account Opening is no longer considered a basic product improvement, but a strategic investment.

Articulate the opportunities and risks for executive management

The economics of digital transformation are important. For years, banks have been closing branches, primarily due to changing trends in customer acquisition. Now – for the same initial investment of opening one new physical branch, a bank or credit union can use MANTL’s Online Account Opening software to acquire customers as if they had opened 10 new branches in a year.

The efficiency gains on the Operations side are game-changing as well. Since customers are coming directly through an efficient digital front door, all of your customer data is already available inside your Account Opening software, which translates to less time managing and processing paperwork and more time building lasting relationships with your customers.

Establish compliance as a key decision-making function

In the aftermath of the 2008 Financial crisis and the passing of Dodd-Frank in 2010, compliance teams are being asked to shoulder great amounts of regulation burden, often with less resources. With that context, getting time and resources allocated to digital innovation projects can be particularly challenging.

Understanding what change means to compliance is also important. Change creates financial and regulatory risk and of course… additional paperwork.

Digital projects are generally front-loaded for compliance, but (if done successfully) should result in significant on-going time savings. This “pull forward” in time and resources needs to be understood by all parties to create alignment.

Digital transformation projects that included compliance as a key component of the decision-making process are significantly more successful, compared to those where compliance was consulted in a peripheral manner. Not only does this process create alignment, but it accelerates your compliance team’s understanding of the new technology and its impact on the compliance function. While not immediately obvious, this early alignment will lead to significant efficiencies in the implementation and initial go-live stages of the project – essentially allowing the organization to transition more quickly into the new technology solution.

MANTL prefers to interact with compliance teams early and often to ensure best practice documentation and training – we built MANTL to serve both banks’ end customer as well as its employees. We firmly believe that’s a crucial part of any technological solution.

Communicate the impact on operations

Generally speaking, operations should see the largest day-to-day benefit from a digitization project. Modern technology is excellent at automating repeatable, manual tasks.

Identifying and articulating the benefits of the new technology for the operational heart of the organization generally falls into these buckets:

  • Greater self-service leading to less customer-service burden
  • Better reporting which improves management decisions and business outcomes
  • Automation improves accuracy, responsiveness and efficiency

The most effective way to ensure a smooth operational change process is to train those team members who’ll be operating the technology day-to-day after its launch, throughout the implementation process.

MANTL recommends including a member of the operations team into the project management group working on the digital initiative for the duration of the implementation. We’ve found that these team members often provide insightful feedback on the likely issues once the project transitions into production and are the best members of the team from a quality assurance perspective. Your best testers will be your operations teammates!

Elevate your digital marketing skill set

In any digital transformation, your marketing department will likely face a big challenge if they need to acquire a new skill set – digital marketing. The long-term success of projects like Online Account Opening is highly correlated with your banks’ ability to make digital customer acquisition a core competency. Traditionally, banks and credit unions have invested heavily and locally in brand building, sponsorships of local community organizations and offline acquisition efforts.

While online brand advertising can be successful, it’s difficult and expensive. To obtain brand recognition digitally requires a level of resources that is typically reserved for the Fortune 500. Beyond the financial restrictions, it’s often difficult for banks and credit unions to authentically develop their brand against challenger/neo-banks, particularly to millennial audiences.

However, performance marketing does provide a measurable and scalable acquisition strategy, particularly for consumer and business deposit accounts. Traditional channels like Google Adwords or rate aggregators like Bankrate and NerdWallet can perform well with the right funnel experience: appropriate marketing landing pages, website and account opening solution.

Similarly, content strategies and partnerships with financially-focused blogs provide long-tail high ROI alternatives to cost-per-click advertising.

Cross-sell and counter-offer engines alongside programmatic cart abandonment email marketing tools are available and will provide meaningful funnel optimization strategies.

Understanding whether your institution has pre-existing marketing capabilities in digital areas or ensuring that your organization is prepared to invest in developing digital marketing as a core competency is key. Marketing represents an area of risk, but also the largest opportunity. If you can successfully up-skill, you’ll create a new and highly lucrative source of proprietary growth.

With MANTL, it is possible for traditional banks and credit unions to become digitally-forward institutions. We provide the essential technology, ease of integration with your core banking system and industry best practices to help you maximize results.

Learn more about how MANTL can help kickstart your digital transformation.

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