At the recent Corelation 2018 event, hundreds of banking executives came together to hear the latest trends, technology and innovations pushing the envelope in banking. This intimate, well-run conference hosted by Corelation, Inc. was jam-packed with informative content, including a panel session led by Nathan Moore, Director of Strategic Development and Service at CFM.
Moore led a discussion with three credit union executive leaders on the topic of putting technology to use in branch transformation. At one point in this session, Moore shared a sobering statistic: 81% of executives feel it is imperative to transform, but only 10% of the same have a clear vision of what to do.
Throughout this discussion, the panelists shared insights on the state of the market today (spoiler alert: it’s not pretty) and the current trends among financial institutions that are making the most impact.
Continue reading to discover (or relive) the key insights from this panel of experts.
The Current State of the Market
A simple examination of the banking industry landscape today turns up some not-so-pleasant observations.
There’s not much differentiation.
When consumers look at their banking options, they often see a lot of the same thing—“cold and boring” branch environments. Contrasted by many retail environments which have found ways to differentiate from one another through design and digital innovations, many banks and credit unions still look and feel the same way they did 20 years ago. What separates your financial institution from all the other options?
In speaking on the panel with Moore, Jim Harris, President/CEO of USE Credit Union, observed that the main barrier for many financial institutions to overcome is attraction. As he put it, “getting people to know who we are is our largest hurdle.” When consumers think that all financial institutions do the same things and offer the same products, no one wins.
Costs are increasing.
Of course cost is another factor to consider when looking at the current state of banking. Branches and ATMs alone make up about 65% of the overall cost structure. Then add in all of the individual technology costs (fueled by the all-too-common “gotta keep up with the Joneses” mindset), and costs end up skyrocketing.
To counter the increasing overhead, financial institutions need to find new efficiencies and adopt innovative technology solutions.
Transactions are decreasing.
While costs are going up, in-person transactions are steadily declining by almost 5% per year. That means those important face-to-face interactions are also declining. Why are those interactions so important? Because they help strengthen the relationship between the financial institution and their clients.
So with less personal interactions happening, branches must make every interaction count that much more. How? By finding new and different ways to meaningfully connect.
Onboarding and retention are challenging.
Attracting, onboarding, and keeping good talent is obviously a key part of an individual branch’s environment—and long term success. But when the physical environment feels “cold and boring” to clients, it’s going to feel the same to prospective employees.
Transformation must also focus on staff in order to attract and retain good talent and provide the best possible client experience.
The Silver Lining
Now that you’ve been treated to those dismal realities, are you ready for some good news? (We thought you might be.)
Considering the state of the market, the general public needs your services now more than ever. Think about it:
- The average amount of individual credit card debt is $15K.
- Almost two-thirds of people don’t have a savings plan for emergencies.
- And retirement planning today is almost nonexistent.
Translated, this means massive opportunity for banks and credit unions to engage, educate and help clients with their products and services. How exactly? One word—differentiation.
Differentiate and win.
Considering the factors listed above, one thing is abundantly clear: In order for financial institutions to survive, differentiation is a must. And the financial institutions that do this best won’t just survive, they’ll win!
Analyzing Today’s Top Trends
Step 1: Follow the trend lines.
The market is telling financial institutions that change is needed, and quickly too. Jerry Bettens, CIO at Michigan First Credit Union and session panelist, agrees. As Bettens put it, “We need to go faster and adopt faster to keep up with our market—and others.” But what trends do we see currently aligning to those needed changes?
According to a recent Celent report, we find 10 major market trends among banks and credit unions that align to addressing these biggest needs. But there are four trends in particular that show how banks and credit union executives are intending to invest right now:
92% of executives ranked tablet-based Universal Associates as a must-have. And for good reason, since the Universal Associate model provides a three-fold win—reduced operating costs, increased employee satisfaction, and a more enjoyable experience for your clients.
Onboarding to Mobile
Client loyalty increases 171% with access to and use of mobile apps and online tools. So what are you doing to get your clients online today?
70% of transactions are routine, uncomplicated tasks. Self-service gives clients the ability to bank the way that feels best to them. Self-service kiosks are common place today in many retail environments. To that point, another panelist, Jeff Benson, SVP/CIO at Bellwether Community Credit Union, added, “We must focus on creating a retail experience to attract and retain members.” Additionally, giving your clients more self-service experiences will lower your transactional costs and provide you with opportunity to increase sales.
Digital, Branch, and HQ Transformation
81% of executives say they understand that transformation is critical to their success, but only 10% have a clear vision for how to move forward. What’s the right investment, scope, size and timeline—and why? What processes do you intend to make more efficient with the technology you implement?
To Summarize: Take Advantage of the Opportunity
It doesn’t take a data scientist to look at the current state of the financial market and see the problems that face most financial institution: An old school look and feel of many branches, the increasing costs, decreasing transactions, and difficulty getting (and keeping) the right staff. But all of these factors add up to one thing: Opportunity.
That’s right—we know what’s working based on the trends we’re seeing. So all that’s left to do is take advantage of the opportunity and start the process of differentiation through innovative solutions for your financial institution.
Are you ready to seize the day and align your branch to some of these trends?
Reach out to our team—we can help set up a Jump Start session to give you a full recap of what’s needed to transform your branch and differentiate your brand.