3 Resolutions for Digital Banking Success in 2021

After such a difficult year, when unexpected changes came at the banking industry so fast, does it make sense to put more pressure on ourselves or set digital banking goals that might be unachievable during a pandemic? Maybe the answer is to become more aware of where we need to make changes and start small.

The past year may have been the most challenging ever from both a personal and professional perspective. While the new year is nothing more than a flip of the calendar, for many it represents a fresh start and a chance to put 2020 in the rear-view mirror.

But how many of us are ready to set highly aspirational personal or organizational goals with so many unknowns on the horizon? More importantly, would it be better to not look at January 1 as some magical date, but instead look at a broader perspective of change and achievement?

Resolutions (or commitments to changed behaviors), whenever they occur, should be done based on individual circumstances and not necessarily based on what other people or firms are doing. For most, change is definitely needed, especially given the disruption in the marketplace.

The question is … how much change is possible?

We also need to realize what goals have been set in the past, and whether they have been achieved. If becoming a “digital bank” has been a resolution for the last several years, and little progress has been made, what will make 2021 different?

Keys to Goal Setting Success

Before goals are even set for the upcoming year, it is important to understand how goals can be achieved. In other words, how can the result of resolution setting be better than in 2020, 2019 or the years prior? It all begins with creating new habits and behaviors. This is as true for organizations as it is for individuals.

Here are some keys that experts say will help you and your organization move forward from 2020:

  • Set aspirational goals. Just because the world around us changed in an instant doesn’t mean that we should be cautious. In fact, because of how consumer behavior changed regarding transacting and engaging with banks and credit unions, this may be the best time to set ambitious goals.
  • Start small. Starting with bite-sized goals that are easier to achieve allows for early wins that can inspire further change and accomplishment. Don’t underestimate the power of smaller tasks that can bring positive feelings to those involved. So, break down the big goals into smaller components that move you and your organization forward.
  • Understand the journey. If there is not a universal understanding of what the future needs to look like, and what is required to get there, it will be close to impossible to reach your destination. Find people and organizations that have taken the journey you are about to embark on and have been successful. The more research you perform on how to achieve your resolution, the more confident you will be in the potential for success.
  • Enlist advocates. Make your commitment public to those who will hold you accountable, and seek out partners who can help you reach your objective. There is no reason to try to change ingrained behavior alone. In most cases, there is a vast array of people and organizations who know what you are trying to achieve and know how to achieve it. Find them and move forward confidently.
  • Prioritize your goals. It is better to set three goals and accomplish two than to set ten goals and not accomplish any (even if progress is made on all of them). While this sounds logical, losing focus because of an overwhelming set of objectives is a common problem. Pick a few goals and commit the financial and human resources to achieve success.
  • Stop making excuses. There are a million reasons for not being able to achieve a goal … especially during a pandemic. In reality, most of these excuses revolve around things under your control (even though there are many things out of your control). It all comes down to your commitment to achievement and your response to unexpected circumstances.
  • Just do it. Setting goals for 2021 will set yourself and/or your organization on the right track for the future, and provide the foundation for future growth. Waiting for the pandemic to end, or change to stop, is a losing strategy. More than ever, it is time to embrace change, take risks and disrupt status quo.

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Becoming a Digital Bank

The Digital Banking Report has conducted a vast amount of research on the importance of becoming a digital bank, and has provided examples of how organizations around the world have embraced digital transformation. In recent research conducted since the pandemic, we have found that the majority of financial institutions do not believe they are prepared for the future.

While many organizations quickly created ways for consumers to open accounts and apply for loans using digital channels, the consumer experience remains far from satisfactory. In fact, most organizations believed they had fallen behind where they were last year in using data and analytics, supporting innovation, investing in technology, and preparing their teams for a digital future.

Understanding the massive consumer and small business behavior changes over the past year has clarified where banks and credit unions must focus their energy in 2021. Below are some of the most important resolutions organizations must to consider in 2021. The priority of importance will differ from organization to organization based on where each institution is in their digital journey.

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1. Make Digital Banking Easier

While the majority of banks and credit unions now have a way for consumers to open accounts, apply for loans and transfer funds using online and mobile channels, most processes replicate the steps done when visiting a branch. As a result, the digital processes require significant completion of forms, answering questions and unneeded steps.

Research by the Digital Banking Report found that most processes took more than ten minutes. This is far too long in a digital world where a consumer can apply for an Apple credit card (and receive the card) in less than one minute. In 2021, organizations need to move beyond just providing digital options to providing digital experiences.

The best way to increase sales, loyalty and customer satisfaction is to reduce the effort needed to proceed along the customer journey. As Jeff Bezos said, “When you reduce friction – make something easy – people do more of it.”

If organizations accomplish only one goal in 2021, it should be to make digital banking easier. All other goals should support this objective.

Customers have been trained by companies like Amazon, Google, Uber, Netflix, Rocket Mortgage and others that processes can be simplified in a digital world. The key is to be able to identify roadblocks and change them for the benefit of both your company and the customer. The risk in the future is that consumers will quickly abandon digital engagements that are cumbersome … before you have a chance to save the sale.

2. Use Data and Analytics to Support all Decisions

The more financial institutions understand their members and customers, the better the experience will be for the consumer. In 2021, financial institutions must harness the power of data and advanced analytics to learn about consumers’ lifestyles, goals and values and to create solutions based on this knowledge.

Consumers are coming to expect personalized communication and recommendations in real time. Creating “contextual intelligence” that can be deployed across the organization, and leveraged for consistent multichannel experiences will generate sales, increase loyalty and even reduce operating expenses.

During a period when consumers are becoming more familiar with what is possible with digital engagement, hyper-personalized communication supported by contextual intelligence is a competitive differentiator. By delivering proactive financial recommendations tailored to each customer’s needs, financial institutions can improve trust, support transparency and increase loyalty and sales.

Most importantly, there are more solution providers than ever willing to work with financial institutions of all sizes to unify disparate data silos, improve data quality, enhance customer understanding and deliver insights that are actionable across the entire organization.

3. Improve Digital Skills

Despite increasing investment in technology and digital capabilities, financial institutions believe there is a significant talent and skills shortage that can stall or even derail digital transformation initiatives. Meeting digital expectations requires the collaboration of humans and modern technology, where humans can enhance the impact of automation and machine learning.

Filling the skills gap will require a combination of internal training (up-skilling), external hiring and partnering with organizations that have the capabilities needed to move forward. The skills gap in banking will only widen if current employees are not trained to work with new technologies. Beyond training the staff level employees, there is also a need to train executives who must lead this transformation. As we have seen, the technical skills of many banking leaders is sorely lacking.

With many employees and managers still working remotely, the opportunity for digital learning in an offsite environment has never been greater. By starting immediately, banks and credit unions will not only be in a better position for the future, they will build a stronger organization of employees and leaders prepared for a digital ecosystem today.

Move From Crisis Mode to Digital Urgency

Making a resolution is a process of committing to a new future. The reason many resolutions are not achieved is either because there is not a passion for the achievement of the goal, or because there is no clarity on how to achieve the resolution.

Note that in the past, I have provided five resolutions for financial institutions to focus on. Given all that has occurred in the past year, and all that is needed to succeed in the future, I thought it was best to reduce the primary resolutions to three ambitious — yet achievable — goals. These goals are not easy and for most organizations have proven elusive. The benefit of achieving these goals is that they set the foundation for all of the other important steps of digital transformation.

Good luck.

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