Last summer, MANTL commissioned the 2021 Banking Impact Report to explore how industry trends are impacting community banks, credit unions, and the communities they serve. We spoke with banking executives, small-business owners, and consumers across every demographic to help us understand what’s at stake for community financial institutions (FIs), and how forward-thinking leaders can navigate what’s next.
In this deep-dive post (the fourth in a series), we’ll explore a key topic from our survey data: digital prioritization. Read on to learn what customers of community financial institutions really want when it comes to digital services so that you can define your strategy, invest your money wisely, and choose the right partners to help elevate your investments.
Every organization in every industry is talking about digital transformation these days. But if digital transformation is to be more than just a buzz phrase, you need a strategy based on a keen understanding of what your customers want as well as the trusted partners that can help you provide those services.
This is especially true for community banks and credit unions. Most everyone knows that true digital transformation involves more than a single piece of technology or just one process that needs to be brought online. But few community FIs have deep enough pockets or the in-house technology expertise to attack every piece of the puzzle at once.
Perhaps this is why digital transformation remains a somewhat mysterious process for many community banks and credit unions. While a recent survey of community FIs indicated that 48 percent of respondents felt that their organizations had “very clear objectives and a path forward to digital transformation,” this means that more than half of such institutions were far less certain about the road ahead.
Digital transformation continues to be a murky concept that nonetheless is eroding the foundation of community banks. That murkiness is reflected in the disparate ways community banks define digital transformation.—Wipfli, The State of Community Banking, 2022 Community Banking Research Report
Digital transformation continues to be a murky concept that nonetheless is eroding the foundation of community banks. That murkiness is reflected in the disparate ways community banks define digital transformation.
—Wipfli, The State of Community Banking, 2022 Community Banking Research Report
So where do you begin your digital journey? You begin by playing to your strengths. Relationships are at the core of community banking, and by listening to your customers and learning what they want, you can design your own roadmap to digital transformation—one that prioritizes the desires and needs of your consumer and small-business customers.
You will of course need to talk to your own clients and look at the particular demographics of your area and customer base, but you can begin by learning about the insights we gleaned from our 2021 Banking Impact Report.
While consumers and small-business owners may differ in what they need and/or expect from their community FIs, they are in lockstep when it comes to their top three desires for digitization:
While consumers and small-business owners begin to diverge a bit at this point in their top candidates for financial service digitization, both groups agree that they would like to see the following advanced features:
And finally, 28 percent of small-business owners would like to see their community FIs offer integration with point-of-sale systems, and 25 percent of consumers are looking for support of peer-to-peer payment methods.
Research by the Digital Banking Report found that financial institutions ranked themselves lower in digital transformation maturity this year than they did in 2020, reflecting consumer expectations that are increasing at a pace faster than most institutions’ ability to deliver. The report also found that data/analytics maturity and innovation maturity in banking also fell in 2021 for the same reason.—“6 Digital Banking Transformation Trends for 2022,” The Financial Brand
Research by the Digital Banking Report found that financial institutions ranked themselves lower in digital transformation maturity this year than they did in 2020, reflecting consumer expectations that are increasing at a pace faster than most institutions’ ability to deliver. The report also found that data/analytics maturity and innovation maturity in banking also fell in 2021 for the same reason.
—“6 Digital Banking Transformation Trends for 2022,” The Financial Brand
Although the over-40 set make up the largest customer segment for most community banks and credit unions, such institutions would be foolish to overlook the desires of their younger (and future) customers. As time passes, Millennials and Gen Z will play an increasingly important role in steering the economy, and in all but the top two categories of advanced services (mobile banking, and alerts and notifications), this group of consumers and small business owners is even more emphatic in their demands and expectations for digital transformation.
For example, even though online account opening was a strongly desired feature among all our survey respondents, 9 percent more Millennial consumers and 3 percent more Millennial small-business owners cited this as a top priority.
Millennials and/or Gen Z respondents also surpassed our overall survey population in the importance they placed on the following advanced features:
Millennial and Gen Z customers also expressed a stronger desire across the board for AI-enabled customer support (with approximately 5 percent more citing this as a top feature). And both Millennial consumers and small business owners exceed the general population in their desire for financial tools for payment, accounting, budgeting, spending tracking, and more.
You’ve listened to your customers. You’ve prioritized your digital offerings. And you’ve created a roadmap for digital transformation. Now, you need a strong partner with a good product. By choosing vendors that will work with and support you as you explore the best path forward, you can ensure your digital success.
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