By Colin Murphy
A CEO recently told me he wants to transform his community financial institution into a digital bank but keeps hitting an all-too-common internal roadblock: “But this is how we’ve always done it.”
The CEO instituted a lot of changes during his first 18 months in the position, but establishing a digital strategy poses a more formidable challenge. I understand what he wants to do and why he’s facing resistance.
When he says “digital bank,” he doesn’t mean doing away with branches or dramatically reducing staff. He’s talking about a shift in how his staff thinks about the way they deliver products and services.
In short, he wants to build a digital mindset.
“Digital mindset” is a fine phrase to toss around, but it doesn’t mean much if you can’t back it up with a clear definition people in your organization can grasp and act on. To me, it means you can no longer look at digital as a distinct channel serving a specific segment of your customer base.
Every consumer is a digital consumer, and to be in banking means you have to be in digital banking. Frankly, digital is no longer an expense; it’s a necessary investment that can deliver real returns for the financial institution.
Leaders across the financial services industry are at a tipping point. Digital banking, particularly mobile, is the fastest-growing banking channel. That’s putting the onus on financial institutions to understand and adapt to the digital maturity, preferences and financial life-stage needs of multigenerational consumers.
You can no longer look at digital as a distinct channel serving a specific segment of your customer base. Every consumer is a digital consumer, and to be in banking means you have to be in digital banking.
Achieving that digital mindset enables an institution to engage consumers on their terms, further strengthening relationships and growing the business. Still, it can feel like a long road between “how we’ve always done it” and how you need to do it to thrive in a digital marketplace.
But there are clear signposts along the way. Here are five key principles to consider when building a comprehensive digital mindset.
1. Develop a digital strategy
The CEO I spoke to is at this stage. His financial institution doesn’t even have a digital banking solution to offer consumers. Before he can establish a digital mindset and offer those solutions, he has to break down the false barriers preventing his organization from moving forward.
How that digital strategy takes shape depends on the individual financial institution’s overall market, target audience and specific goals for growth. There isn’t a one-size-fits-all strategy for institutions to adopt.
Sometimes the biggest challenge is acknowledging that change is needed and a digital strategy is the solution. Many financial institutions turn to a partner to help kick-start that transformation, offering an outside voice through strategy sessions and other discussions.
Those sessions can help turn a vision into a strategy. When developing that digital strategy, though, make sure it’s end to end, enabling you to drive engagement at every touchpoint, whether online, mobile, through a call center or in the branch.
Dive deeper to ensure each touchpoint complements the other. Make it easier for consumers to move from channel to channel no matter where they are or how they choose to interact.
2. Look in the mirror
Building a digital mindset requires an honest assessment of your institution’s digital assets and competencies. Look across your organization and objectively assess your digital strengths and weaknesses, internal capabilities, staff, processes, technology and leadership.
Determine your capabilities. Can your people become digital advocates? Do you have a budget for digital transformation? Do you want to be a digital innovator ahead of the competition? Or are you content being six months or a year behind, waiting for innovations to be proven in the market?
Look at your customer base and the markets you serve and assess what they want and need. Consumer expectations for a credit union on a college campus are generationally much different than for a credit union serving the automotive industry.
How do you want to grow? Do you want to expand beyond your current market?
Do you have a digital superhero in branch who can explain digital to people who are on the fence and encourage them to try it?
3. Execute the strategy
Strong strategy execution depends on multiple factors: innovative solutions, across-the-board training, productive partnerships, and the right people, processes and technology.
The idea that digital is all-encompassing has to permeate the organization, particularly among the call center and branch front-line staff. Consumers want an integrated experience no matter where they are or how they choose to interact. Is your staff trained to meet those expectations? Do you have a digital superhero in the branch who can explain digital to people who are on the fence and encourage them to try it?
Being digital advocates strengthens relationships and differentiates the financial institution.
That’s how your organization can rise to the challenge posed by nontraditional, digital providers. Capitalize on your place in the community and meld it with digital prowess.
Executing the strategy begins with your staff and continues with products and services. Are you responding to what consumers want with features such as touch ID, remote capture and deposit, real-time payments and bill-payment solutions? Do you have integration across channels? Do you have features in branch, such as a digital kiosk, that tie to mobile and online?
People want convenience and time-saving services, but the standards for that keep rising. Continue looking ahead for digital advancements such as card controls, credit scoring, transfers between funds and accounts, and even voice banking.
4. Optimize for different demographics
Add layers to your strategy. Tailor your adoption marketing to the different generational segments of your audience based on their financial needs and digital preferences.
Look across your organization and objectively assess your digital strengths and weaknesses, internal capabilities, staff, processes, technology and leadership.
That starts with understanding, at least in a general sense, the tendencies of different generations. Here is a rough breakdown, compiled from internal Fiserv data:
- Generation Z, or the digital sage: Digital is in their DNA, and they prefer those interactions, usually through mobile
- Generation X, or the optimist: They’re eager to learn how to use and interact through digital channels
- Baby boomers, or the pragmatists: They’re open to using digital channels and interacting through them to see if it is an improved experience
- Seniors, or the digital doubters: They prefer more traditional banking interactions but will try digital for certain activities if it proves to be helpful and easy
5. Maintain and enhance relationships
Executing a digital strategy is the starting point, rather than the finish line. How are you maintaining your touchpoints and engaging with digital consumers? Nurture those relationships, whether in the branch or through digital.
Data analysis can be the key to adapting with your consumers, serving up new products and services based on their digital banking profiles. For instance, if people are using your credit score service, enhance the experience by integrating personal financial management capabilities.
Extend that data analysis to your marketing department. Make sure it has all the tools it needs to analyze the data and push certain services to targeted segments of your audience. And let marketing expand its reach by leveraging targeted social media messaging that offers new ways to engage with consumers.
The digital mindset imperative
It’s often easier to change what people do than to change how they think. It’s a reality confronting every financial institution leader grappling with the constant evolution of a digital world.
The first step is to understand one important fact: Choosing to remain rooted in the traditional way of thinking is to risk becoming obsolete.
A strong digital mindset opens the door to deeper engagement with consumers and a more cost-effective business model. Financial institutions need to establish that mindset to help them grow.
The key is to stay focused on the consumer experience through all touchpoints and make sure your services are intuitive, inspired and innovative. More than anything, always solve the problem, no matter what it is, for the consumer.