United States

Digital transformation, what’s hot?


Traffic continues to decrease in most institutions as customers of all generations are taking advantage of the variety of digital options available to transact business.  Much like we have seen in the retail arenas, this isn’t a “fad” this is our new normal and to survive we need to compete.  In many communities, the local institutions are struggling under the pressure of regulations and inability to attract qualified staff.  We are competing not only with the “big banks” and alternative financial services but financial technology (fintech) and the large technology budgets and innovation teams.  How do we compete?  What are the tools we can utilize to meet our customers’, members’ and employees’ needs?  How do we best utilize our limited resources?

The changing of the branch

Historically, the branch was the symbol of the institution, a community gathering spot and iconic proof of the stability and security of a customer’s money.  Today, there are many ways to interact with an institution and customers are taking advantage of the omnichannel options.  Why?  Convenience.  As customers’ lives have become more complicated and multitasking is a birth skill, we need to evolve to meet their needs.

Self-service branch designs are more prevalent throughout the country.  They can vary from fully automated microlocations to utilizing smart ATMs for overflow traffic.  There’s no single right answer if it is what your customers need.  How do we effectively utilize the branch to provide value-added services? Digital solutions that many are assessing to support a more effective branch structure include:

  • Recyclers—are a mini-safe; they have the ability to receive and distribute currency, pull bad bills, detect forgeries, sort currency and are self-balancing. Checks are scanned upon deposit. A few key benefits beyond scanning and balancing include: increased security since the tellers can’t open the machines, segregation of duties—allows for smaller staffing and better management of cash shipments.
  • Interactive teller machines (ITMs)–have the ability to issue cashiers’ checks and gift cards, open new accounts and loan applications, and distribute and collect cash.  In addition to the enhanced features, customers can choose to interact with a real person.  Location, location, location is the key for a successful launch.  Hospitals, colleges, grocery stores and microlocations all seem to work well.   Many are utilizing ITMs and call centers to offer extended hours.
  • Video conferencing — technology has greatly evolved in the past few years. Expensive bulky cameras, cords and delays are a thing of the past.  With today’s meeting options, this is a viable option for any institution.  Often utilized to better leverage expertise across your footprint, a location may only need a wealth advisor a few times a month.  Utilizing video conferencing allows the right people to be where needed with real-time interaction to serve your customer’ needs.  Typically, a monitor is mounted in an office, to allow for privacy, but can also be leveraged for organization-wide training and communication.
  • Cameras—not the cameras of old watching entrances and teller drawers, but the ones utilized as a secondary control, allowing for smaller staffs.  As an example, when you flip through television channels, you may land on a poker tournament.  Even as the players hold the cards low, cameras are set on the edge of the table to allow the audience to have an insider’s view.  Consider this concept in a vault environment, where the cash shipments are received, etc.  Do we need two people if we have well-placed cameras?  When remodeling or building new locations, cameras should be considered for security, cost and flexibility.

The mobile branch

Convenience drives so much of our lives as well as our customers’.  Recent surveys and interviews align to what you are seeing, customers want options, rarely are they only interacting with the institution in a single manner.  Customers are driving the push towards total mobile banking and the merger of online and mobile into a single digital platform.

  • Website – a core piece of your omnichannel approach. Beyond traditional banking features, how can we meet our customer’s need? Consider utilization of fintech products to better customer experience.  As community institutions, we don’t typically have the skill or budget of our largest competitors, but we can leverage other tools to enhance our customers’ experience.
  • Mobile applications – as mobile expands annually, and in-branch traffic decreases, embrace this as your new front door.  Beyond traditional banking functions, utilization of mobile deposit capture and meeting capabilities has increased.  Couponing remains a favorite of users and is an opportunity for institutions to express their commitment to the community by featuring local vendors.  Often overlooked is the opportunity to use the app to advertise community activities.  As an institutions, you dedicate budget and resources to the community; call it out, “We’re sponsoring the football game, join us in supporting our kids.” “Come walk with us this weekend at the charity walk.” The banner ad can be utilized for more than the latest rates.
  • Personal financial managers— allow for the storage of financial instruments, point of sale (POS) payments and budget management. Very sticky service as it helps manage the user’s financial life.  Mobile wallets are dramatically increasing in use across all generations.
  • Use of social media— it isn’t going away, even if lots of people would like it to.  Monitoring your standing is vital. Think of the last time you were on vacation or in a new city, and it was time to pick a place for dinner, what did you do?  Pulled out your phone and searched “Dinner near me” and started scrolling for stars and review comments.  If you’re checking out comments for a single meal, customers are definitely checking reviews for their institutions.

An efficient organization

As the regulations continue to multiply, and our customers are requiring so much more, we can’t forget our staff.  The cores are old, but what can we do to best utilize the technology we have?

  • Workflow tools – help manage the review and approval process for a variety of tasks.  These tools speed the process, and increase accountability and visibility to the organization.
  • Corporate performance management (CPM) tools – one of the largest struggles within institutions is the ability to convert data into information.  CPM tools will create financial reporting and enhance the budgeting process, additionally generate dashboards, key performance indicators (KPIs) and user defined views.  CPM is intended for the end users, not programmers, so most users can easily create ad hoc reports and dashboards.
  • Many other solutions are available depending on the need; the key is not to assume there isn’t a solution as the core doesn’t offer it.  Effective use of one-off tools can create leverage.

Regardless of where you are on the digital transformation path, we are all on the path.  There are a number of solutions available, and some you may own today but are not fully utilizing.  Working through the digital transformation planning guide, listening to your customers and the customer support staff will allow you to spend wisely and best meet your institution’s needs.