Banks and credit unions need a clear path to digital transformation - yesterday

If you feel like you’ve aged ten years in the last four weeks, raise your hand. Financial services institutions around the country have had a crash course in learning the importance of a solid digital strategy. Those organizations who have had strong digital leadership and fearless innovation over the past few years will be the ones who come out ahead. However, if your organization has dragged its feet or felt that digital was less of a priority, you’re probably feeling the most pain.

The big takeaway right now is that change can’t wait. It’s here. Now is as good a time as any to take a hard look at your digital performance during this crisis, evaluate what went right and wrong, and create a clear path to becoming more digitally and customer-focused. 

We’ve outlined the top four areas to consider when you’re ready to perform your own digital audit.

Digital leadership

The single most important element for a successful digital transformation is leadership. When the highest levels of the organization embrace and encourage change, it becomes easier for the rest of the organization to adapt.

That doesn’t mean that your c-suite needs to understand website usability or data manipulation. I’ve worked for an organization where the CEO flat out admitted that he doesn’t understand digital. He knew that it was needed but didn’t need to know the nuts and bolts. He empowered his people to present innovative plans and to execute them. Without his leadership, that company probably would not have survived.

What your leadership team needs to do is facilitate an environment of change. Any way you slice it, transformation won’t happen unless your leadership team embraces, encourages, and expects it. You don’t necessarily need to know exactly what to do, but you do need to be sure your organization prioritizes digital transformation, that resources are made available, and that you choose the right partners and people to lead you.

Questions to ask:

• Do we have any digital champions internally? What is their role in transformation? What can we do to help remove their roadblocks?

• Do we have the right partners helping to lead the way?

• What is the general feeling around becoming more digitally oriented through the rest of the company? What can we do to better communicate the importance?

• How can we empower our employees to speak up and be innovative?
  

Customer service

One thing we’ve certainly learned over the past few weeks is that while customers need and want online tools to use at their convenience, it's certainly no replacement for one-on-one customer interaction. People need people. This should be a relief for those at your organization who may have seen digital as competition. It's not. It’s a complement, and it will drive more business to your loan officers, financial planners, and bankers.

Now that this idea has been proven, it’s a good time to review how well your institution was positioned to service your customers in a timely and effective manner. Were your customers able to find the information they need on your website to self-serve? Where are they able to contact you via phone, chat, or other methods? Did they wait for long periods of time? Did your single online info request form adequately manage the influx of questions and route them to the right individual? Were you able to follow up with every single request? Answers probably range between “nope” and “sort of,” with hopefully a “yes!!” thrown in there.

It's safe to say the old school “sit back and let them come to us” attitude is not future proof. The organizations who have been working on innovative customer service tools were in a better position coming into this crisis. A perfect case-in-point is Umpqua Bank’s Go-To app, which connects customers directly with bankers.

Remember that even when there is not a global emergency, many people might be living with their own personal crisis. Providing flexibility in how they interact with your bank and how you provide service to them could make a tremendous difference in their lives (and that’s truly what being customer-focused means).

Questions to ask:

• What has been our biggest internal customer service pain point?

• Do we know our customers’ challenges? Not only banking-related but in how they have been interacting with us? If not, how can we find out?

• How much business have we lost by not being able to fulfill customer service requests?

• How many simple questions are we fielding over the phone that can easily be answered online?
  

Core technology

If you’ve prioritized in-branch account setup, it's time to consider how to attract and convert customers without human interaction.

While it's easy to blame a lack of digital sophistication on the technology stack your financial institution has currently implemented, it's also probably somewhat accurate. Early in the move to digital banking, a few online banking vendors emerged as leaders. With minimal competition and little pressure from banks and credit unions to improve usability and effectiveness, their platforms have remained pretty much the same for the last ten to fifteen years. Meanwhile, the customers’ journey and expectations have changed dramatically.

Many times, these vendors will charge thousands for your organization to apply your own web analytics and measure performance, so you likely have no good data showing how well these platforms convert users into new customers or how many customers you’ve lost as a result of a poor user experience.

It's no longer adequate to simply have a method of signing up for an account or applying for a loan online. The experience for both the customer and the loan officer must be frictionless. Data must be portable. Reporting must be meaningful and actionable. Optimizations and improvements must be continuous.

We are hoping to see some movement from these vendors post-COVID and even see some new players come into the market. Some organizations should consider whether it’s in their best interest to build their own systems which would allow for a flexible, custom-fit approach and release the tether of a third-party vendor.

One example of this approach is the online auto loan application on Credit Union of Texas’s website. With just three steps, the customer can apply for their loan. Data is passed into SalesForce where a loan officer can follow up and finalize the process. This was possible because the credit union chose platforms that are easily extensible and designed to talk to each other.

You can read more on the Credit Union of Texas digital transformation here

Beyond the online banking tech stack, you’ll want to look at your website’s content management system (CMS), your customer relationship manager (CRM), email platforms, advertising systems, and reporting tools. Have these platforms allowed you to be flexible and react to day-to-day changes? Do they talk to each other? Do you have meaningful data that you can act on?

You’ve almost certainly experienced pain points recently with your systems that slowed down your response time or your ability to service or communicate with customers. These challenges might have seemed not important a month ago. That has all changed. You need to identify those issues so a plan can be built to address them.

Questions to ask:

• How much has online account openings and online loan applications increased or decreased during the past month? If we don’t know this, why not? If we’re not looking at this regularly, why not?

• Are we able to tell how website usage has changed? Do we know how our email marketing has been performing?

• How quickly can we turn around changes in hours, policies, products and other announcements through our digital channels?

• How easily are we able to extract analytics and insights from our customer data? Do we have a process for acting on these insights?

Of course, there’s much more to digital transformation than this. Starting here can help you to identify the most important tasks to act on.  If you need third-party validation or if you need help conducting an assessment of your technology stack, let us know and we’ll be happy to help you.