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Three Ways to Compete in an Evolving Digital Market

Oct  13 
Staff Writer   

Embracing consumer expectations can give banks, credit unions an edge

The evolving digital market is posing two major challenges to banks and credit unions: find ways to enhance their role in people's lives and protect against industry disruptors that threaten to step between financial institutions and consumers.

The response to both challenges starts with a focus on digital transformation and understanding that meeting consumer expectations isn't just a check-the-box task. It's a holistic, ongoing business philosophy. Digital transformation never ends, and consumers' expectations change with every new experience.

Thriving in what has become an intensely competitive market means constantly scanning the digital horizon to see what's next and always anticipating new consumer expectations. Here are three strategies to help achieve that goal.

1. Focus on Intuitive Experiences

In a world of "you bought this, so you might like this," providing only basic, transactional services falls short. Customers and members want to feel like their financial institutions understand them. They want personalized, seamless, know-me experiences.

Financial institutions have the most important tool to provide those experiences: data. Turning that data into actionable information provides an opportunity to understand consumer behaviors and preferences and then personalize the experience.

It's not just in-the-moment engagement. Truly intuitive experiences show consumers that their financial institutions understand them. Not only are banks and credit unions responding to immediate requests, but they're also anticipating what people might need next.

That could mean knowing when someone needs a personal loan. It could be helping consumers remember to pay their bills or providing prompts to add more money to an investment account.

Financial institutions know so much about consumers. It's not a big leap, then, to leverage that information to provide as equally an engaging experience as Uber, Grubhub or Amazon.

Thriving in what has become an intensely competitive market means constantly scanning the digital horizon to see what's next and always anticipating new consumer expectations.

2. Achieve Excellence in Every Channel

Consumer preferences for how they interact with their financial institutions run the gamut, from mobile to in person.

Recent Fiserv research underscores the importance of delivering stellar experiences in every channel. The 2021 Expectations & Experiences Fintech Adoption research showed that mobile overtook branches as consumers’ preferred method of interacting with their primary financial organizations. Online banking remains the top choice, with 34% saying it is their preferred way; mobile follows with 30%, and branch at 25%. 

Meeting all expectations requires cohesion across the service platform, so if a consumer uses digital and the branch, it's not a completely different experience from one to the other. If a financial institution has phenomenal staff for in-person engagement but the online or app banking experience lags, it's a missed opportunity and, potentially, a risk of losing accounts.

It's not just about technology rising to the level of the in-person experience. It's every channel working as one. Tellers have robust, 360-degree access to a consumer's recent transactions and needs. From a business and corporate perspective, financial institutions could then blend in third-party data to make recommendations on expansion and commercial lending opportunities.

3. Embed Financial Services in Consumers' Lives

Whether on their own or with a trusted services provider, financial institutions are positioned to expand their presence in consumers' lives. It can happen in subtle, seamless, everyday ways that make life simpler for consumers and commercial clients.

Consider a woman who wants to buy a backyard fireplace. She calls a store owner, who offers suggestions and financing options. The woman, through her phone app, applies and is immediately approved for a new loyalty credit card from the store owner's bank. She then receives a push notification through her bank's mobile app and sets up a payment plan for the fireplace.

At the store owner's bank, the manager receives a notification that the store's fireplace sales are going so well that it's a good time to meet about possible growth options, such as commercial loans to open a second location. The bank takes the step of contacting the store owner to discuss those possibilities.  

It's easy to settle for passive transactional engagements. But strengthening relationships by making a difference in business owners' and consumers' lives means tightly integrating additional services that might otherwise be overlooked. That mindset allows financial institutions to leverage the entire services ecosystem.

Competing With Confidence

Financial institutions are facing stiffer competition and increased pressure to meet consumer expectations. But there are ways to overcome those challenges.

It starts by taking a broader approach to the services banks and credit unions provide. Being open to those possibilities and innovative in delivering new services can position financial institutions to enhance efficiency, accelerate growth, and satisfy their customers and members.